Water Companies in England and Wales Propose Significant Bill Increases Amid Infrastructure Upgrades

Water companies across England and Wales are proposing substantial increases in water bills over the next five years, ranging from 24% to 91%, according to figures from the Consumer Council for Water (CCW).

Southern Water is seeking the highest increase at 91%, while South Staffordshire and Cambridge Water are asking for the lowest rise of 24%.

These proposed hikes are intended to fund a £100 billion investment plan aimed at upgrading aging infrastructure, reducing leakage, and cutting down on sewage discharges into rivers and seas. The decision on these increases will be made by the industry regulator, Ofwat, which is set to determine allowable charges for the 2025-2030 period in a crucial meeting this week.

Public Reaction and Regulatory Scrutiny

The public reaction to these proposed increases has been largely negative, with a survey mandated by Ofwat revealing that fewer than one in six customers find the proposed bill rises affordable. The regulator is expected to approve only a portion of the requested increases, potentially agreeing to bill hikes of at least half the amounts requested by the companies, and in some cases, more than half.

Mike Keil, Chief Executive of the CCW, expressed concern, stating that the proposed bill hikes will "come as a massive surprise to people." He emphasized the need for water companies to clearly communicate the benefits of these investments to their customers.

Breakdown of Proposed Increases

Here's a breakdown of the proposed average bill increases:

• Southern Water: 91% increase to £915 per year by 2030

• Thames Water: 59% to £749

• Hafren Dyfrdwy: 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% to £330

• Pennon: 33% to £644

• Portsmouth Water: 31% to £157

• SES: 30% to £315

• Anglian Water: 29% to £682

• Northumbrian Water and Essex & Suffolk Water: 26% to £530

• Affinity Water: 25% to £294

• South Staffs & Cambridge Water: 24% to £221

These figures reflect the varying challenges and required investments across different regions in England and Wales. Southern Water's significant proposed increase is attributed to major infrastructure upgrades needed to address serious existing problems.

Justification and Criticism

Southern Water's Chief Customer Officer, Katy Taylor, acknowledged concerns over rising payments but highlighted the necessity of significant investment to address the water-stressed region's unique challenges. This includes reducing storm overflow usage, safeguarding water supplies for a growing population, and protecting the environment.

Southern Water, owned by Australian firm Macquarie, has faced criticism for its management practices during its ownership of Thames Water. Despite this, Macquarie has recently invested £500 million into Southern Water to support these initiatives.

Water UK, representing the industry, stated that while bill increases are "never welcome," companies are significantly increasing financial support for customers struggling to pay their bills. Ofwat is currently scrutinizing the plans to ensure that only new, necessary, and value-for-money investments are approved.

Next Steps

Ofwat will release a preliminary report on the bill rises it expects to approve on June 12, with final figures to be published in December. The ongoing scrutiny aims to balance necessary infrastructure improvements with customer affordability.

In contrast, water services in Northern Ireland and Scotland remain publicly owned, providing a different context for water management in those regions.

The proposed bill increases highlight the significant financial and operational challenges facing the water industry in England and Wales as it seeks to modernize infrastructure and address environmental concerns.