The eagerly awaited review of potential water bill increases in the coming years has been delayed due to the General Election. Ofwat, the water regulator, has postponed its consultation on draft pricing decisions for the sector until July 11.
Initially scheduled for June 12, the announcement was deferred after Prime Minister Rishi Sunak called an election for July 4. The consultation will see Ofwat deliver its preliminary judgement on water companies’ business plans up to the end of the decade, a process it undertakes every five years.
The fate of Thames Water, Britain’s largest water firm, could be determined by this decision. Thames is facing possible nationalisation after investors reneged on a pledge to provide additional funding, leaving the company’s finances hanging in the balance.
With a debt pile of approximately £15 billion, Thames, along with other water companies, has been embroiled in a scandal over water pollution.
Thames has requested Ofwat to permit a hike in customer bills by an average of 44 percent over the next five years to facilitate investment in infrastructure and balance its books. Proposed bill increases across the rest of the industry range from 14% for Northumbrian Water to a staggering 73% at Southern Water.
This comes despite sewage spills into England’s rivers and seas more than doubling in 2023. According to the Environment Agency, there were 3.6 million hours of spills last year equivalent to about 400 years compared with 1.75 million hours in 2022.
Ofwat, the water services regulation authority, clarified its stance by stating that it is adhering to pre-election guidelines for civil servants, insisting on caution regarding decisions that could affect the campaign’s outcome. The regulator reassured that the new price controls scheduled for its 2024 review would be enforced from April 1, 2025, irrespective of the delayed release date of its preliminary decisions.
Furthermore, it noted: “Ofwat is currently looking into the impact the date change will have on the rest of the price review process.”
