Water companies have been provisionally allowed to increase customer bills by an extra £3.4 billion, a move that has drawn sharp criticism from Conservative leader Kemi Badenoch, who accused them of being “rewarded for failure”.
Ofwat's draft decision
Water watchdog Ofwat said on Thursday that five suppliers across England and Wales could raise bills to cover the additional spending. This comes despite millions of people facing hosepipe bans this summer and billions of litres of water leaking from ageing pipes daily – a problem that can worsen as dry soil causes the ground to shift amid record-breaking heat.
The firms provisionally allowed to increase bills between 2027 and 2030 include debt-laden Thames Water, along with Severn Trent Water, Southern Water, Wessex Water and South East Water.
Political backlash
Mrs Badenoch said: “A hike in water bills is the last thing the public need when they’re already struggling with Labour’s cost of living crisis. If we are going to fix the water industry we need stronger regulation to stop water companies racking up huge debts, better management by the regulator, and long-term infrastructure investment.”
She added: “Brits thoroughly fed up with poor service and sewage spills from their water providers will be furious about this latest reward for failure.”
Prime Minister Andy Burnham took aim at Ofwat’s draft decision, saying customers “cannot be treated as a blank cheque”. He said: “I understand why people are angry – I am too. The truth is customers have been asked to pay more for years, yet serious pollution incidents are at record levels and the pipes are still leaking. None of which is the billpayer’s fault, who should not be treated as a bottomless source of funding for other people’s failures.”
Campaigner and industry responses
Clean water campaigner and Undertones star Feargal Sharkey said: “Ofwat accelerates incompetence to new levels of the stratosphere by now demanding and ensuring that water companies' customers are held ransom, and are forced to continue to pay for their own exploitation, and allowing yet more greed and incompetence to permeate what remains of the environment and our water system.”
Amy Fairman, River Action's head of campaigns, said: “Ofwat waving through yet more water bill hikes is an insult. For 30 years, where was the investment in our crumbling water infrastructure? Tens of billions went to investors while essential water and sewage works were neglected. We got leaks, pollution and soaring bills.”
Cat Hobbs, director at public ownership campaign group We Own it, said: “While private water bosses are paying themselves huge bonuses disguised as ‘signing-on payments’, what do customers get? Hosepipe bans during a heatwave. And now even higher bills.”
A spokesman for Water UK, which represents suppliers, said: “This summer’s drought has shown exactly why new investment is so vital. This expenditure will help to safeguard services, unlock new homes and business growth, and replace ageing infrastructure. For most customers there will be no immediate impact on bills. Where bills will rise, we recognise any increase is difficult and help is available for anyone struggling to pay.”
Helen Campbell, executive director for delivery at Ofwat, said: “The newly agreed funding will help unlock much-needed new housing development and boost business growth across a range of sectors, as well as improving drinking water quality and the removal of PFAS and forever chemicals. We will track performance to ensure companies are delivering the expected improvements for customers and the environment. If they don’t, expenditure can be clawed back.”
The draft determination follows a three-month review by Ofwat, with the 13 firms originally putting forward requests for further investment of £4.3 billion. Ofwat will consult on the draft decision until September 24, with a final verdict due in December.
