Millions in UK set for £94 water bill hike in fresh increase

Struggling families will be punished by greedy water firms over their failure to invest in crumbling infrastructure and reduce sewage spills, campaigners have said.

Water companies, whose shareholders and bosses have pocketed millions, could increase bills in England and Wales by an average of £94 over the next five years.

This is a third less than the increase requested by companies, under draft proposals announced by water regulator Ofwat today.

Former Undertones frontman Feargal Sharkey said: "The simple truth is that yesterday was supposed to provide the foundation for the water industry’s future. It’s done exactly the opposite. It’s the beginning of the end for Ofwat. It’s over. It has failed.

“No amount of wishful thinking from Ofwat will change the ugly, disastrous, contemptuous way that they’ve treated customers, bill payers and the environment.

“They are allowing water companies to put up bills by a large amount to pay for infrastructure they should have already paid for with customer bills. Customers are therefore having to pay twice.”

Mr Sharkey plans to march to Parliament later this year to protest against the state of the environment and the nation’s rivers.

The keen angler said: “I will be expecting hundreds of thousands of people to turn up outside Parliament to voice their absolute disdain and fury about Ofwat and its continued incompetence and inability to act on their behalf.”

Ofwat said the average 21% bill increase, around £19 per year, follows firms’ proposals to increase their total spending by £29 billion, split between a £5 billion increase in the core costs for running their business and a £24 billion rise in spending to meet requirements set by governments and for other environmental improvements.

The regulator's proposals are part of the 2024 Price Review (PR24) and cover the period from 1 April 2025 to 31 March 2030, ahead of a final decision at the end of the year.

James Wallace, CEO of River Action, said: “These bill hikes punish households struggling with the cost-of-living crisis for the abject failure of greedy water companies to invest in their crumbling infrastructure and reduce record sewage spills.

“For decades the industry has put profit before the environment, rewarding its shareholders with billions in dividends, and in the process filling our rivers with human sewage.

“The water companies have realised they’re in a mess of their making and have successfully appealed to Ofwat to approve increases in water bills to climate proof their infrastructure. It begs the question, what have they been doing all these decades and what exactly are households paying their water bills for, apart from lining the pockets of fat-cat CEOs trousering massive bonuses and seeing huge dividends flow to shareholders?

“Remember, this is an industry that spews millions of litres of sewage into rivers and wastes three billion litres of water a day.

“We must fix this national embarrassment of systemic sewage pollution which has caused environmental carnage to our rivers.”

Meanwhile Chancellor Rachel Reeves promised the Government will “get a grip” on the water sector, saying: “It’s clearly a bitter pill for people who are seeing today’s announcements about higher water bills.”

Environment Secretary Steve Reed met with representatives from all 16 water companies from across England and Wales in Westminster yesterday (THURS) where he proposed new measures to reform the sector.

This includes ring fencing funding for infrastructure investment and prioritising customers and the environment.

Consumers will also gain new powers to hold water company bosses to account through new customer panels, while there will be more compensation when things go wrong.

Mr Reed said: “This is a reset moment. Every penny that is being earmarked for investment in fixing the sewage system will be spent on fixing the sewage system.

“It will not be diverted into bonuses and dividends in the ways the Conservatives permitted. Everything changes today.”

There are significant variations in proposed price hikes between suppliers.

Thames Water’s planned rise of £191 by 2030 has been reduced to £99, while Severn Trent’s proposed increase of £144 has been cut to £93.

Under the plans, Southern Water customers will face a £183 increase over five years, while Dwr Cymru customers’ bills will go up by £137 and Yorkshire Water customers will pay £107 more.

At the other end of the scale, Affinity customers will see just an £11 rise, while SES customers’ bills will fall by £34 on the previous five years.

David Black, Ofwat chief executive, said: “Customers want to see radical change in the way water companies care for the environment. Our draft decisions on company plans approve a tripling of investment to make sustained improvement to customer service and the environment at a fair price for customers.

“These proposals aim to deliver a 44% reduction in spills from storm overflows compared to levels in 2021. We expect all companies to embrace innovation and go further and faster to reduce spills wherever possible.”

Sewage spills into England’s rivers and seas more than doubled last year.

According to the Environment Agency, there were 3.6 million hours of spills last year – equal to about 400 years – compared with 1.75 million hours in 2022.

A Water UK spokesman, which represents the water firms, said: “Today’s announcement is the biggest ever cut in investment by Ofwat. If it doesn’t put this right, Ofwat will be repeating the mistakes of the past. As a direct result, more housing will be blocked, the recovery of our rivers will be slower and we will fail to deal with the water shortages we know are coming.

“Ofwat is right to want to ensure customers receive value for money and that is why protections are in place to ensure customers only pay for projects that are new, necessary and value for money.

“But for far too long Ofwat has failed to be realistic about the levels of investment needed and what it will take to deliver and maintain necessary infrastructure. We cannot allow this pattern to repeat itself.

“Water companies are ready to invest in an unprecedented overhaul of the country’s water and sewage infrastructure. Ofwat now needs to let them get on with it.”