Millions of households in England face higher water bills after the Competition and Markets Authority (CMA) provisionally allowed five water companies to increase charges by an additional £556 million over the next five years. This represents only 21% of the £2.7 billion the companies had requested. The affected suppliers—Anglian, Northumbrian, Southern, Wessex, and South East Water—serve 14.7 million customers and will add an average of 3% to bills on top of a previously approved 24% increase.
The companies appealed to the CMA in February after Ofwat, the industry regulator, rejected their initial requests for larger rises. They argued that additional funds were needed to meet environmental standards. Water bills have become a contentious political issue in the UK amid public anger over sewage discharges into rivers and seas.
Water Minister Emma Hardy acknowledged public frustration, stating: “I understand the public’s anger over bill rises – that’s why I expect every water company to offer proper support to anyone struggling to pay. We’ve made sure that investment cash goes into infrastructure upgrades, not bonuses, and we’re creating a tough new regulator to clean up our waterways and restore trust in the system.”
The CMA’s expert panel largely rejected the companies’ funding requests for new activities and projects beyond those agreed by Ofwat. However, it allowed more money for returns to investors to reflect sustained high interest rates. For example, Anglian Water sought a 10% increase to £649 but was granted 1% to £599, while Southern Water asked for 15% to £710 but received 3% to £638.
Kirstin Baker, chair of the appeal group, said: “We’ve found that water companies’ requests for significant bill increases, on top of those allowed by Ofwat, are largely unjustified. We understand the real pressure on household budgets and have worked to keep increases to a minimum, while still ensuring there is funding to deliver essential improvements at reasonable cost.” Consumer and environmental groups criticised the decision, warning that customers may pay more without seeing improvements.
