Water bills: Millions of households face further rise after appeal of Ofwat decision
Millions of households face higher water bills after five utility companies were allowed to temporarily raise charges above initial regulatory limits.
The Competition and Markets Authority (CMA) confirmed that independent experts allowed Anglian Water, Northumbrian Water, South East Water, Southern Water and Wessex Water to increase their tariffs following an appeal.
Firms had argued that Ofwat’s initial decision would prevent them from meeting key regulatory obligations.
As a result, Anglian and Northumbrian Water will now be able to increase bills by an additional 1 per cent, Southern Water by 3 per cent, South East Water by 4 per cent and Wessex Water by 5 per cent.
Southern Water had achieved an average bill increase of 53 per cent over the next five years but was still seeking a further 15 per cent increase.
Anglian Water was allowed 29 per cent and required 10 per cent more; As for South East Water, 24 percent was given and another 18 percent was requested.
Wessex and Northumbrian, which were initially allowed a 21 per cent increase, sought a further increase of 8 per cent and 6 per cent respectively.
The CMA said an interim decision allowed 21 per cent of the total £2.7 billion claimed by the five firms, or an additional £556 million in revenue.
Kirstin Baker, who chaired the group of independent experts appointed by the CMA to consider price controls, said: “We found that water companies’ demands for significant bill increases on top of what Ofwat allows are grossly unjustified.
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“We understand the real pressure on household budgets and have worked to keep increases to a minimum, whilst ensuring there is funding to deliver significant improvements at an affordable cost.”
The CMA said the extra money would fund more resilient supply, reduce pollution and reflect increased financing costs.
In December, Ofwat said it would allow water companies to increase their bills by an average of £157, or 36 per cent, over the next five years to help fund crumbling infrastructure investment.
But in March Ofwat formally submitted requests for the five companies to have their bill increase allowances redetermined after claiming the decision left them unable to meet the regulatory requirements set for them.
This began a six-month period for the CMA to consider their objections.
Water minister Emma Hardy said: “I understand public anger about bill increases, so I expect every water company to offer appropriate support to anyone struggling to pay.
“We’ve ensured investment money is spent on infrastructure improvements, not bonuses, and we’re creating a tough new regulator to clean up our waterways and restore confidence in the system.
“We focused on easing cost-of-living pressure on households: freezing fuel duty, increasing the minimum wage and pensions and cutting mortgage rates – putting more money in people’s pockets.”
