Millions in England to pay higher water bills after suppliers appeal | Water bills
Millions of households in England will pay higher water bills than previously expected after the competition regulator made its final decision on industry spending plans for the coming years.
Five water companies had applied to the Competition and Markets Authority to be allowed to increase their bills higher than what industry watchdog Ofwat had initially allowed. On Tuesday the CMA said it would allow them to increase annual bills by an average of 2.2%.
The five companies (Anglian, Northumbrian, Southern, Wessex and South East) together serve 14.7 million customers.
Thames Water, the UK’s largest supplier with 16 million customers, also initially objected but later withdrew amid crisis talks to reduce its debt burden and secure its future.
Under England and Wales’s mostly privatized water system, Ofwat sets the amount suppliers can charge customers over a five-year period. In December 2024, it was said average annual household bills could rise by 36% to £597 by 2030 to help pay for maintenance and investment.
The companies that applied argued they should be allowed to spend more than that to replace their creaking networks of pipes, sewers and reservoirs.
The CMA said on Tuesday it would allow additional revenue expenditure of £463 million, 17% of the extra £2.7 billion requested by the five firms.
The extra spend will be financed by a 2.2% increase for customers; This is above the average increase of 24% that Ofwat currently allows across these five companies.
Water bills in England and Wales will rise again in April, by an average of £33 per household in the latest increase above inflation. Last year’s annual increase was £123 at the start of the five-year period.
The decision could become a political headache for environment minister Emma Reynolds after the sector’s ratings hit rock bottom last October, at a time when sewage leaks were at record levels.
The pollution scandal has been highlighted again in recent weeks following Channel 4’s Dirty Business, which told how private companies were allowed to pollute Britain’s rivers and waterways.
An independent group of experts appointed by the watchdog had initially said they would allow £556m of extra spending in an interim ruling in October, but they have scaled back that figure in the months since.
Kirstin Baker, the group’s chief executive, said: “We have rejected most of the bill increases requested by water companies, but have allowed limited extra funding where it is really needed, balancing concerns about affordability with the need to secure our water supplies and reduce pollution.
“A significant part of this extra money reflects market movements since Ofwat’s decision.”
