Ofwat gives green light to cut water bills by £50 by 2025

Water firms in England and Wales will have to cut the average bill by £50 over the next five years, under plans published by the industry regulator Ofwat.

The move is part of water regulator Ofwat’s approval of a huge investment plan for water companies, aimed at improving their performance. The move was part of its price review for 2020-25 by confirming a major investment programme to improve services for customers and the environment.

Ofwat has revealed a spending package of £51 billion for the next five years. A quarter of this, around £13 billion, will be investment dedicated to providing resilient services and a better environment in the face of a growing population and climate change.

Customers will also see a reduction in average bills of about £50 before inflation. The regulator has secured this by demanding greater efficiency, passing through lower financing costs and promoting more innovation.

Ofwat Chief Executive, Rachel Fletcher, said “Today we’re firing the starting gun on the transformation of the water industry backed by a major investment programme to deliver new, improved services for customers and the environment and resilience for generations to come. Now water companies need to crack on, turn this into a reality and transform their performance for everyone.”

“They will be investing the equivalent of an extra £6 million each and every day to overhaul services, strengthen their infrastructure and improve our natural environment. And at the same time, customers’ bills will fall by an average of £50 before inflation.”

Tony Smith, Chief Executive of the Consumer Council for Water, said “Most customers will see this as a good deal but more must be done to make sure everyone can afford their bill and ensure there is sufficient investment in safeguarding these essential services long into the future.”

“Water companies have had it too good for too long. At first glance, it appears Ofwat has listened to our repeated calls for it to get tougher and tip the balance back in favour of customers. But we’ll be keeping a close eye on the performance of companies to make sure customers are not short-changed.”