Ofwat’s Leakage Reporting Consultation: Why Leakage Is Still an Estimate, and What Large Sites Can Copy
TL;DR: Ofwat opened a consultation on 27 August 2026 on how water companies calculate leakage, and it closes on 9 October. The regulator’s own position is striking: leakage reporting in England and Wales is still an estimation, not a calculation, because so much household use is unmetered. The consultation asks whether night flow extrapolation should give way to a 24 hour mass balance built on smart meter data. Any large site can run the same method on its own pipework today.
Last updated: 11 September 2026
On this page
Key takeaways
- Ofwat opened its leakage reporting methodology consultation on 27 August 2026. It closes on 9 October 2026 and asks ten questions.
- In Ofwat’s own words, leakage levels are the lowest in the 35 years since privatisation, yet the way companies report leakage is still an estimation, not a calculation.
- The core question is whether bottom up leakage should keep being extrapolated from night flows, or move to a 24 hour mass balance.
- Smart meters are the reason it is possible now: over the next 15 years Ofwat expects all but a few customers to be fitted with one.
- Targets are not changing. The consultation is about the method, and any revisions are aimed at the design of the 2029 price review.
What is Ofwat consulting on?
Ofwat is consulting on the method water companies use to calculate and report leakage, so that reported figures use far more meter data, mainly from smart meters, and become more accurate, consistent and transparent. The consultation opened on 27 August 2026 and closes on 9 October 2026.
The leakage reporting consultation is deliberately narrow. Ofwat says it is not a consultation on leakage reduction targets, on the level of ambition expected from companies, or on the incentive rates attached to performance. It is about how the number is produced, and it sets out concerns with the current method, the options considered, preferred options where they exist, and a possible timeline.
That makes leakage reporting sound like a technical footnote. It is not, because every leakage target, penalty and headline in the sector rests on it. Change how the figure is calculated and you change what everyone thinks they know about leakage.
Why is leakage still an estimate, not a calculation?
Because the water balance behind leakage reporting has a hole in it. Leakage is calculated as the water put into supply minus the water delivered to customers, and many household customers in England and Wales do not have a meter. Their use has to be estimated, so the residual reported as leakage is an estimate too. Ofwat says exactly this on its leakage reporting methodology page.
Countries that meter every customer can use the simpler top down method developed by the International Water Association. Leakage reporting in England and Wales uses the top down calculation too, and then cross checks it against a bottom up estimate built from night flows, measured when demand is lowest.
Ofwat’s own description of the existing approach is candid: it relies on extrapolation from sample data, estimates and assumptions. The consultation exists because leakage reporting is about to change. Over the next 15 years, Ofwat expects all but a few customers where it is impossible to fit one to have a smart water meter, which makes it possible to migrate leakage reporting from an estimation to a calculation for the first time.
Night flows or a 24 hour mass balance?
This is the most interesting question in the document. Today the bottom up check takes the flow into a district at night, subtracts an allowance for legitimate night use, and extrapolates the result across 24 hours. Ofwat is asking whether that should continue, or whether leakage reporting should move to a 24 hour mass balance: every litre in, every litre out, all day.
The difference matters because night flow analysis assumes the night is representative. A leak that behaves differently under daytime pressure, or legitimate night use that is larger than the allowance assumes, both distort the answer. A mass balance makes no assumption about the night. It needs good meters at every boundary instead, which is why the same consultation asks whether leakage reporting needs a metering standard and how compliance would be encouraged.
Ofwat’s preparatory work already points at the metering gap. Its page notes that companies run many meters of differing technologies, ages and accuracy, and that the current reference is the abstraction metering good practice manual. A tighter, more consistent standard is on the table, with its costs considered.
What else is on the table?
Ofwat is asking ten questions about leakage reporting in all. Beyond night flows and metering, four stand out for anyone who manages water on a large site:
- Smart meter data. How to bring data from millions of customer meters into the leakage calculation.
- Upstream leakage. Whether leakage on trunk mains and service reservoirs should be reported as a mass balance, using strategic upstream balances or smaller upstream flow monitoring zones.
- Customer supply pipes. Ofwat notes that companies with large numbers of household meters report that a not inconsiderable share of leakage sits on customer supply pipes, the connections customers own.
- Pace. Whether changes should be a step change or phased, whether shadow reporting is needed, and what investment better leakage reporting requires.
There is no change to leakage reporting for the 2025 to 2030 period. Ofwat has said there are no plans to change the reporting method or the leakage targets set for that price control, and it plans to fold any revisions into the design of the 2029 price review. Our guide to customer-side leakage covers the supply pipe question in more depth.
What can a large site copy from this?
The method, not the paperwork. Ofwat’s direction of travel is from estimates and night flow snapshots to metered boundaries and a continuous mass balance. A hospital, campus, factory or housing estate can run that exact logic on its own pipework now, at a scale where it pays back quickly, because every litre lost past the boundary meter is a litre on the bill.
A site mass balance needs three things. Metered boundaries, so each building or zone has a known inflow. Storage accounted for, so a tank filling overnight is not mistaken for a loss. And continuous data, so the balance closes every hour rather than once a quarter.
That is what the AQUAIOT Clamp-on Ultrasonic Flow Meter and the AQUAIOT Radar are built for. The flow meter fits the outside of live pipework from DN8 to DN100 with no cutting, which turns each building supply into a metered zone without a shutdown. The radar measures tank level without contact, to within ±2 mm, which is how the storage term in the balance stops being a guess.
Once the zones exist, leakage reporting on a site becomes arithmetic: inflow, minus metered use, minus the change in storage, every hour. Our guides to water balance monitoring and night flow analysis show how the two methods work side by side, and why the 24 hour view catches what a 3am snapshot misses.
Who should respond to the consultation?
Water companies will, but leakage reporting questions are not only for them. Anyone with a view on metering accuracy, supply pipe leakage or how smart meter data should be used can respond, and large non-household users see the customer side of the boundary more clearly than most. Ofwat asks for responses by email or post by 9 October 2026, and says responses may be published.
If your organisation runs its own metering on a large estate, the questions on a metering standard and on phasing are where practical experience is most useful. Keep the answer specific: what accuracy you achieve, at what cost, and what it took to close a balance.
Frequently asked questions
What is leakage reporting?
Leakage reporting is how water companies calculate and publish the volume of water lost from their networks each year. In England and Wales it combines a top down water balance with a bottom up check from night flows, and Ofwat sets the method through its leakage performance commitment definition.
When does the Ofwat leakage consultation close?
It opened on 27 August 2026 and closes on 9 October 2026. Ofwat will publish an outcome document after it closes, and plans to reflect any changes in the design of the 2029 price review.
Will leakage targets change?
No. Ofwat says the consultation does not cover leakage reduction targets, the level of ambition or incentive rates, and there are no plans to change the method or targets for the 2025 to 2030 price control.
What is a 24 hour mass balance?
It is a calculation of losses over a whole day: all the water entering a zone, minus all the water metered out of it, minus any change in storage. It replaces the assumption that one night hour represents the whole day with continuous measurement at every boundary.
Can a business site calculate its own leakage?
Yes. Meter the incoming supply and each building or zone, account for tank storage, and compare inflow with metered use every hour. Clamp-on flow meters and non-contact level sensors make this possible on live systems without shutdowns.
Where to start
Ofwat’s consultation is a regulator admitting that leakage reporting, behind the sector’s most quoted number, is still an estimate, and setting out how to turn it into a measurement. The tools that make that possible for a national network already make it possible for a single estate.
Start with the incoming supply and the two or three buildings that use the most water, add the storage tanks, and let a month of continuous data show where the balance does not close. The leak detection service covers the sensing, telemetry and alarm layer end to end.
Speak to an AQUAIOT engineer about metering your estate’s boundaries, and we will help you design the zones, the storage points and the balance you report against.