Thanks Nick,
I've looked closer today in the light and took the bung out. Its actually a piece of plastic with holes in and the orange bit you can see is a very thin bit of rubber and I am able to see how the water comes out now.
Looks like it is supposed to be there after all !
I have got water under the drivers side carpet and loosing a small amount of coolant. I now expect this to be the heater matrix.
Cheers
Steve