Water companies ask to raise bills by even more than first planned
Southern Water, Thames Water and others demanded steeper increases than set out earlier this year despite regulator Ofwat trying to reduce rises.
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Water companies have asked to increase consumer bills by even more than they originally requested, according to figures released by watchdog Ofwat on Tuesday.
The latest requests by water firms would see the average consumer bill in England and Wales rise by 40% between now and 2030, costing £615 per year.
Earlier this year, companies asked Ofwat for bills averaging £585 by 2030, an increase of about one-third from the current average of £439.
This summer, the regulator pared back those requests to an average of £535, in its draft price review in July.
But now, after a consultation period, 10 of the 11 water companies have hit back with even higher requests than before.
We will consider this additional expenditure request as part of our final determinations
Many argue that they need to spend more on upgrading their pipes, sewers and reservoirs than originally planned, and therefore need bills to go up too.
Ofwat wrote in an update on Tuesday that this is “mostly to meet the requirements of other regulators like the Environment Agency and Drinking Water Inspectorate”.
But some of the increases are designed to meet “changes to the proposed rate of return for investors”.
Ofwat is due to make a final decision on bills increases on December 19, with companies going to the negotiating table with regulators before then.
The watchdog wrote: “We will consider this additional expenditure request as part of our final determinations.”
The latest string of demands come amid public and political outcry over sewage spills in the privatised water industry, while companies’ investors receive dividends and top executives get bonuses.
A recent performance report by Ofwat showed there has only been a 2% reduction in pollution since 2019 despite firms committing to cutting it by 30%.
Labour has suggested sweeping new laws which could see bosses face up to two years in jail if they obstruct regulators – but so far nothing has come into force.
The biggest proposed rise is by Southern Water, which would see bills for its customers in Sussex, Kent and Hampshire rise by 84% between now and 2030.
Thames Water, the UK’s biggest provider, which is in emergency talks over a £15 billion debt pile and a worsening financial situation, has asked for a 53% rise.
The next biggest increases requested are by Severn Trent Water, of 46% to £580, and North Wales provider Hafren Dyfrdwy, of 45% to £568.
Only one company, Wessex Water, is not demanding higher bills than first requested.
From the Government’s perspective, our priority is making sure that money goes where it’s needed and ensuring that water companies are putting customers first. If money isn’t spent, it will be returned to customers
Downing Street said no-one wants to see water bills rising and the Government will work to ensure “money goes where it’s needed”.
The Prime Minister’s official spokesman said: “Clearly no one wanted to see a situation where water bills are rising, where the water sector has got into the situation that it has with record levels of sewage spills and ageing infrastructure.
“That’s why when this Government came in they set out a raft of measures to drive change in the industry, clean up our waterways, including the new Water Bill.”
He added: “Ofwat are the independent regulator and will make their final determination in December.
“From the Government’s perspective, our priority is making sure that money goes where it’s needed and ensuring that water companies are putting customers first. If money isn’t spent, it will be returned to customers.”