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- Author, Simon Jack and Oliver Smith
- Role, Business editor and business reporter, BBC News
-
Water companies in England and Wales want bills to rise by 24% to 91% over the next five years, according to figures from the consumer watchdog.
Southern Water is asking for the biggest jump of 91%, while South Staffordshire and Cambridge Water are asking for the lowest increase of 24%, according to the Consumer Council for Water (CCW).
Water companies say the increases will fund £100bn of spending over the period, including replacing aging, leaking pipes and reducing sewage discharges into rivers and seas.
The latest demands for a bill come ahead of a crucial meeting this week where regulator Ofwat will decide what companies can charge between 2025 and 2030.
Water utilities have been heavily criticized for widespread leaks and the amount of sewage discharged, which critics blame on underinvestment in the country’s infrastructure.
Fewer than one in six customers find the increase in water bills affordable, according to a survey that saw Ofwat demanding companies survey their own customers.
The regulator is unlikely to fully approve the law’s increases, but the BBC understands it is expected to agree to increases of at least half the amount companies are asking for, and in some cases significantly more than the half.
CCW CEO Mike Keil said the law’s increases “will come as a huge surprise to people.”
“People want to see improvements, they understand that this will require investment, but I think the scale of what is being proposed here will be a real shock and this is why water companies have redoubled their efforts to explain what people are. what they get their money for,” he said.
How much do companies want to increase their bills?
- Southern Water – increase of 91% to £915 per year by 2030
- Thames Water – 59% to £749
- Hafren Dyfredwy – 56% to £676
- Severn Trent – 50% up to £657
- Wessex Water – 50% up to £822
- Yorkshire Water – 46% to £682
- Dŵr Cymru – 43% to £702
- United Utilities – 38% to £666
- South East Water – 35% £330
- Portsmouth Water – 31% to £157
- Anglian Water – 29% to £682
- Northumbrian Water and Essex & Suffolk Water – 26% to £530
- Affinity Water 25% to £294
- South Staffs & Cambridge Water – 24% to £221
Source: Consumer Council for Water
Estimates are for average bills. Costs vary depending on the taxable value of a property
The latest figures from the CCW include changes from the companies, regulator Ofwat and other bodies, including the Environment Agency, since their five-year plans for the 2025-2030 period were first submitted last October.
The proposed increases include a forecast inflation rate of 2%, which is in line with the Bank of England’s target.
There is a very wide range of proposed bill increases, reflecting the very different challenges faced by businesses in different parts of England and Wales.
Southern’s very high figure reflects major improvements to water infrastructure that have had serious problems.
Katy Taylor, Southern Water’s chief customer officer, said the company shared “everyone’s concerns about rising payments”, but added that “the water needs of our water-stressed region present a unique set of challenges that require significant investment”.
She said the money from higher bills would be used to “reduce the use of storm overflows, secure water supplies for a rapidly growing population and protect the environment.”
Southern Water is owned by Australian firm Macquarie, which has come under fierce criticism during its time as Thames Water’s largest shareholder.
In five of the 10 years it owned Thames, the company paid out more dividends than profits, while debt rose from £2.5 billion to more than £10 billion in the same period.
Macquarie points out that it recently injected £500m of additional cash into Southern Water.
Water UK, which represents suppliers, said increases in bills were “never welcome” and added that water companies are “massively increasing the level of financial support they provide to customers struggling to pay their bills”.
“Ofwat is currently investigating these plans and will only allow investments that are new, necessary and value for money. It will not allow water companies to spend money on something for which they have already received funding,” the trade association said.
Ofwat will publish a preliminary report on June 12 on the law increases it expects to pass. The figures will be finalized in December.
In Northern Ireland and Scotland, water services are publicly owned.