Millions of households face rising water bills despite ongoing hosepipe bans and widespread drought conditions across the country. The water regulator, Ofwat, has granted provisional approval for five water suppliers to increase charges above previously agreed levels to fund new infrastructure projects.
The decision comes as approximately three-quarters of the country is experiencing drought, and over 20 million people are currently under hosepipe bans. The companies permitted to seek bill increases include Thames Water, Southern Water, South East Water, Severn Trent, and Wessex Water.
Ofwat stated that the provisional go-ahead is to enable £3.4 billion in new projects, including infrastructure for housing and data centers. This follows an earlier allowance for bills to increase by 36 percent between 2025 and 2030, with an average increase of 5.4 percent already implemented from April. Critics have branded Ofwat as 'toothless' for allowing these hikes, particularly as the companies involved have lost billions of liters of water through leaks.
Prime Minister Andy Burnham expressed anger over the situation, stating that water companies should not use customers as a "blank cheque." However, he has faced challenges regarding potential government action. "Customers cannot be treated as a blank cheque. Where water companies seek to pass unnecessary costs on to households, they will be challenged," Burnham said.
Specific proposed increases include Southern Water customers, who could see bills rise by £80 over the next two years. Southern Water lost approximately 37 billion liters of water to leaks last year and already has some of the highest average bills at £759 annually. Thames Water, which is reportedly facing potential special administration due to significant debt, was also permitted to raise bills for its 16 million customers.
Other companies with provisional approval include Severn Trent, serving around 8 million customers, and Wessex Water, whose 1.4 million customers may see bills rise by £11 over two years. South East Water, serving 2.3 million people, could see a £1 increase. The proposed rises are subject to consultation until September 24, with a final decision expected in December.
Ofwat has indicated that company performance will be monitored, and funding can be clawed back if expected improvements for customers and the environment are not delivered. Southern Water and Wessex Water have stated they will support customers facing payment difficulties, while Severn Trent and South East Water are reviewing the proposals.
The current situation is exacerbated by ongoing public concern over water companies pouring sewage into rivers, lakes, and seas, and significant water loss through leaky pipes, which critics attribute to underinvestment in infrastructure. These issues have intensified anger as the industry faces scrutiny over executive bonuses and dividends paid out while services are perceived to be failing and environmental standards are low.