Water bills to rise by £94 in the next five years

Water regulator Ofwat has announce that water bills in England and Wales are set to rise by an average £94 over the next five years.

The average bill increase for water and wastewater companies will be £19 a year over five years (£94 in total), excluding inflation. Companies’ business plans proposed increases averaging £144 over five years. Ofwat’s interventions have reduced the level of bill increases proposed by companies. For example, Thames Water’s proposed increase of £191 by 2030 has been reduced to £99; Severn Trent’s proposed increase of £144 has been reduced to £93.

Companies have been required to prepare for the future by setting their plans in the context of a 25-year delivery strategy. These proposals include the work of the regulators’ joint team RAPID, which is helping to accelerate the delivery of £17bn of new water assets including 6 reservoirs, some of which are part of the wider programme of major projects; in total 9 new reservoirs are proposed.

It comes as suppliers have come under increasing scrutiny over their environmental and financial performance over a number of years.

David Black, Chief Executive, Ofwat 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.

“Today’s announcement also increases the resilience of our water supplies to the impact of climate change and will reduce how much water is taken from rivers by enabling a range of long-term water supply projects, which includes plans for 9 reservoirs.

“Let me be very clear to water companies. We will be closely scrutinising the delivery of their plans and will hold them to account to deliver real improvements to the environment and for customers and on their investment programmes.”

Independent Age Chief Executive Joanna Elson, CBE said “Ofwat’s announcements today confirm that many people will be facing significant increases in their water bills from next year. This is extremely worrying; any increase will further stretch the limited budgets of older people living in financial hardship. Our own polling revealed 75% of older people living on a low income (under £15k) in England would find it difficult to afford an increase of 40% on their water bills, the average increase originally proposed by the water companies. Unlike other utilities, you can’t shop around for better water deals, you must go with your local provider. This means many people will be stuck with a severe bill increase they simply cannot afford.  

“The older people living in financial hardship that we speak to have been forced to make drastic cutbacks to reduce their water costs. We have heard harrowing accounts of people showering less, reducing the amount of laundry they do and even cutting down on how often they flush the toilet.  Having to make changes like this can be socially isolating and detrimental to someone’s mental and physical health. This shouldn’t be happening in modern Britain.  

“Social tariffs are available to help those living on a low income, but the generosity and eligibility criteria of these tariffs can also vary greatly depending on where you live. The new UK Government must grasp the opportunity to end this unfair postcode lottery by introducing a single social tariff.  A person’s address shouldn’t determine the level of support they receive towards essential bills, and nobody in later life should have to limit their water usage just to get by.”   

Mike Keil, Chief Executive of the Consumer Council for Water (CCW), said “Millions of people will feel upset and anxious at the prospect of these water bill rises and question the fairness of them given some water companies’ track record of failure and poor service. Customers understand investment is urgently needed but they need reassurance that every pound of their money is going to be well spent. Trust in water companies has never been lower and that won’t change until people see and experience a difference – whether that’s having the confidence to swim at their favourite beach or receiving help if they are struggling to pay their bill. ”

“We estimate about 2 million households in England and Wales currently cannot afford their water bill and while the increase in financial assistance is welcome it falls short of what is needed. Over the summer we’ll be carrying out research with customers of every water company to gauge whether they feel the regulator’s proposals are affordable and deliver what people want. We expect Ofwat to listen and act on what customers tell us.”