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- Author, Simon Jack and Oliver Smith
- Role, Business Editor and Business Reporter, BBC News
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Water companies in England and Wales want bills to rise between 24% and 91% over the next five years, according to figures compiled by the consumer watchdog.
Southern Water is claiming the biggest jump at 91%, according to the Consumer Council for Water (CCW), with South Staffordshire and Cambridge Water claiming the lowest at 24%.
Water companies say the increase will fund £100bn of spending over the period, which will include replacing aging, leaky pipes and reducing waste water discharges into rivers and seas.
The latest demands to increase bills come ahead of a crucial meeting this week where industry regulator Ofwat will decide what companies can charge between 2025 and 2030.
Water companies have been heavily criticized for widespread leaks and the amount of wastewater discharged, which critics blame on insufficient investment in the country’s infrastructure.
Fewer than one in six customers think water bill increases are affordable, according to the survey, which Ofwat asked companies to conduct on their own customers.
The regulator is unlikely to approve the bill increase in full, but the BBC understands it is expected to agree to bill increases of at least half the amount the companies are asking for, and in some cases well over half.
Mike Keil, executive director of CCW, said the bill increase “will come as a big surprise to people.”
“People want to see improvement, they understand that it takes investment, but I think the scale of what’s being proposed here will be a real shock and that’s why the water companies have redoubled their efforts to explain what people are like. get your money’s worth,” he said.
How much do companies want to increase their bills?
- Southern Water – 91% increase to £915 a year by 2030
- Thames Water – 59% to £749
- Hafren Dyfredwy – 56% to £676
- Severn Trent – 50% to £657
- Wessex Water – 50% to £822
- Yorkshire Water – 46% to £682
- Dŵr Cymru – 43% to £702
- United Utilities – 38% to £666
- South East Water – 35% £330
- Portsmouth Water – 31% to £157
- Anglian Water – 29% to £682
- Northumbrian Water and Essex & Suffolk Water – 26% to £530
- Affinity Water 25% on £294
- South Staffs & Cambridge Water – 24% to £221
Source: Consumer Council for Water
The estimate is for average accounts. Costs will vary depending on the rateable value of the property
The latest figures from CCW include changes from companies, regulator Ofwat and other bodies including the Environment Agency since their five-year plans for 2025-2030 were first submitted last October.
The proposed increases include an assumed inflation rate of 2%, which is in line with the Bank of England’s target.
There is a very wide range of proposed law increases, reflecting the very different challenges facing companies in different parts of England and Wales.
The very high number on the Southern reflects major upgrades to the water infrastructure, which has had serious problems.
Katy Taylor, Southern Water’s chief customer officer, said the company shared “all concerns about rising payments” but added that “water demand in our water-stressed region presents a unique set of challenges that require significant investment”.
She said the cash from the higher bills would be used to “reduce the use of storm spillways, secure water supplies for a rapidly growing population and protect the environment.”
Southern Water is owned by Australian firm Macquarie, which faced heavy criticism during its time as Thames Water’s largest shareholder.
In five of the 10 years it owned Thames, the company paid out more in dividends than it earned in profits, while debt rose from £2.5 billion to more than £10 billion over the same period.
Macquarie points out that it has recently injected a further £500m into Southern Water.
Water UK, which represents the supplier, said bill increases were “never welcome”, adding that water companies were “massively increasing the level of financial support they offer to customers who are struggling to pay their bills”.
“Ofwat is currently scrutinizing these plans and will only allow investment that is new, necessary and value for money. It will not allow water companies to spend money on anything they have already received funding for,” the industry body said.
Ofwat will publish a preliminary report on the rise in the law, which it expects to be approved on June 12, with figures to be finalized in December.
Water services are publicly owned in Northern Ireland and Scotland.