Customers in England and Wales are bracing themselves for a potential hike in water bills over the next five years, as they await to hear what measures firms will implement to enhance their services.
Ofwat, the water services regulator, is set to unveil its ‘draft determinations’ this Thursday. This will reveal whether it approves of companies’ proposed bill increases, which are based on their expenditure plans, before making a final decision at the year’s end.
Southern Water has put forward the steepest request among utility companies, seeking a 73% increase that would take annual bills to £727. Wessex Water, on the other hand, has asked for a 36% rise, taking bills to £690 annually.
Thames Water, serving 16 million customers across London and the Thames Valley region, proposed a plan in April to boost spending to a staggering £19.8 billion. This is intended to modernise its infrastructure and minimise sewage spills.
However, this would also mean a 44% increase in customer bills to £627, a proposal that has sparked outrage among consumer groups.
These proposed hikes come amidst public anger over companies’ rampant pollution of waterways with sewage spills, even as they continue to distribute dividends to shareholders and bonuses to executives. This is an issue Labour has vowed to tackle head-on.
The number of sewage spills into England’s rivers and seas more than doubled in 2023. The Environment Agency reported a shocking 3.6 million hours of spills last year, equivalent to around 400 years, compared to 1.75 million hours in 2022.
Not a single river in England is deemed to be in good overall health, with popular beauty spots such as Windermere in the Lake District suffering from sewage spills. This has sparked outrage among campaigners who argue that privatised water companies have prioritised paying out billions to shareholders and executives over investing adequately in the nation’s water infrastructure.
However, these utilities highlight the substantial investments they have made.
The significant amount of water lost due to leaks in the system is also a major concern, especially during dry spells when hosepipe bans are imposed on consumers.
Recent research by the University of Greenwich indicates that investors have extracted £85.2bn from 10 water and sewage firms in England and Wales since the industry was privatised over three decades ago.
In more recent news, England’s three largest listed water companies Severn Trent, South West Water and United Utilities all increased their dividend payouts this year compared to the previous year.
New regulations were implemented last year to ensure that water companies can only pay dividends if they are deemed to have delivered for both customers and the environment.
Mike Keil, Chief Executive of the Consumer Council for Water, stated in May that customers would not accept future bill increases “unless they see and feel a step change in the service they receive from their water company whether that’s having the confidence to swim at their local beach or experiencing a more reliable water supply.”
“If customers are going to be asked to pay considerably more, they have a right to expect far more in return.”
