Water companies want bill increases between 24% and 91%

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  • author, Simon Jack and Oliver Smith
  • role Business Editor and Business Reporter, BBC News

Water companies in England and Wales want bills to rise by between 24% and 91% over the next five years, according to figures compiled by the consumer watchdog.

Southern Water is asking for the biggest jump of 91%, according to the Consumer Council for Water (CCW), with South Staffordshire and Cambridge Water asking for the lowest increase of 24%.

Water firms say the increases will fund £100bn of spending over the period, which will include replacing ageing, leaky pipes and reducing sewage discharges into rivers and seas.

The latest demands for bill hikes come ahead of a crucial meeting this week when industry regulator Ofwat will decide what companies can charge between 2025 and 2030.

Water companies have been heavily criticized for widespread leaks and the amount of sewage being dumped, which critics have blamed on insufficient investment in the country’s infrastructure.

Fewer than one in six customers think the increase in water bills is affordable, according to research that Ofwat requires companies to treat their own customers.

The regulator is unlikely to approve the full bill increase, but the BBC understands it is expected to agree to bill increases of at least half the amount companies are asking for, and in some cases significantly more than half.

Mike Keil, chief executive of CCW, said the bill increases “will come as a big surprise to people”.

“People really want to see improvements, they understand it requires investment, but I think the scale of what’s on offer here will be a real shock and that’s why the water companies are redoubling their efforts to explain what people are getting for your money,” he said.

How much do companies want to increase their bills?

  • Southern Water – 91% increase to £915 per year by 2030
  • Thames Water – 59% to £749
  • Hafren Dyfredwy – 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% £330
  • Portsmouth Water – 31% to £157
  • English 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

Source: Consumer Water Advice

The forecast is for average accounts. Costs will vary depending on the appraised value of the property

The latest figures from CCW include changes from the companies, regulator Ofwat and other bodies including the Environment Agency after their five-year plans for 2025-2030 were first presented last October.

The proposed increases include projected inflation of 2%, which is in line with the Bank of England’s target.

There is a very wide range of bill increases on offer, reflecting the very different challenges faced by companies in different parts of England and Wales.

Southern’s very high figure reflects major improvements to water infrastructure that has had serious problems.

Katie Taylor, Southern Water’s chief customer officer, said the company shared “everyone’s concerns about rising bills” but added that “the water needs of our water-stressed region present a unique set of challenges that require significant investments’.

She said the cash from the higher bills would be used to “reduce the use of storm overflows, protect water supplies for a rapidly growing population and protect the environment.”

Southern Water is owned by Australian firm Macquarie, which has come under fire for its time as Thames Water’s largest shareholder.

In five of the 10 years he has owned Thames, the company has paid out more dividends than it has made profits, while debt has risen from £2.5bn to more than £10bn over the same period.

Macquarie points out that it has recently injected £500m of additional cash into Southern Water.

Water UK, which represents suppliers, said bill rises were “never welcome” and added that water companies were “massively increasing the level of financial support they offer to customers who are struggling to pay their bills”.

“Ofwat is currently scrutinizing these plans and will allow investment that is new, necessary and value for money. This will not allow water companies to spend money on something they have already received funding for,” the industry said.

Ofwat will publish a preliminary report on the bill increases it expects to approve on June 12, with figures to be finalized in December.

Water services are publicly owned in Northern Ireland and Scotland.

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