Millions of households in England and Wales face a new increase in water bills as the industry regulator, Ofwat, has approved additional charges to fund £3.4 billion in investment. The decision has drawn sharp criticism from politicians and consumer groups who argue it undermines efforts to ease the cost of living.
Five of the 13 water suppliers have been provisionally given the go-ahead to raise charges between 2027 and 2030. This additional funding is intended to upgrade networks to accommodate new housing and data centers, and to address 'forever chemicals' to ensure drinking water safety and reliability.
Andy Burnham, a prominent critic, described the water firms as treating customers "as a blank cheque" and "a bottomless source of funding for other people's failures." He reiterated his commitment to seeking greater public control over the water industry, stating that customers should not bear the cost of company failures.
Among the companies permitted to increase customer bills are Thames Water, Severn Trent Water, Southern Water, Wessex Water, and South East Water. Notably, Thames Water, Southern Water, and South East Water have all imposed hosepipe bans on their customers this summer. Ofwat has previously allowed significant bill increases, with a 36% rise slated between 2025 and 2030, and an average increase of 5.4% implemented from April this year.
Southern Water customers are set to experience the largest increases, with an £80 rise over the next two years. Currently, these customers pay an average of £759 annually, following an 8% increase earlier this year. Burnham expressed his understanding of public anger, highlighting record pollution incidents and ongoing leaks despite years of increased customer payments.
The Consumer Council for Water (CCW), representing customers, stated that the decision comes at a time when households are already grappling with broader cost-of-living pressures. The CCW urged Ofwat to demonstrate that the entire £3.4 billion investment is necessary.
Water companies have faced scrutiny in recent years over rising bills coinciding with poor performance in areas such as sewage spills, water quality, and supply failures. Thames Water, Britain's largest water supplier with approximately 16 million customers, is among those allowed to increase bills, despite facing significant debt and potential government intervention.
Environment Secretary Angela Eagle acknowledged the public's frustration, calling the water sector's regulation "toothless" and pledging fundamental reform. Liberal Democrat MP Tim Farron criticized Ofwat as a "rubber stamp for failure," arguing that bill payers are being unfairly charged to fix neglected infrastructure.
Water UK, representing the suppliers, argued that the increased investment is vital, especially after the summer drought, to safeguard services, support growth, and replace aging infrastructure. They acknowledged that bill increases are difficult and that assistance is available for those struggling to pay.
Ofwat will conduct a consultation on the draft decision until September 24, with a final ruling expected in December. Helen Campbell, executive director for delivery at Ofwat, stated that the funding will support necessary developments and environmental improvements, with performance being monitored to ensure companies deliver as expected, with potential clawbacks if they fail.