Water bills to increase by 36% in the next five years, regulator Ofwat reveals

Water companies have been given a green light to increase bills by more than a third in a move that has already been branded a ‘bloody disgrace’.

With Christmas just days away, this will be seen as a dagger in the heart of the public.

It is estimated that household water bills in England and Wales will rise by an average £31 a year over the next five years – significantly higher than the expected average of around £20 a year per household.

Reacting to the news, Matthew Topham, lead campaign at the group We Own It, told Metro: ‘It’s utterly disgraceful that after 35 years of bonus scandals, sewage spills, and huge dividends, water firms are set to be rewarded by Ofwat with huge inflation-busting bill hikes. It’s little more than government-sanctioned daylight robbery.

‘Why should Brits have to cut back on food and other essentials, as many fear these hikes will require, to pay a privatisation tax to wealthy overseas shareholders?

‘The public desperately want a champion to step in and defend them. The government’s own papers suggest they could save enough through public ownership to keep bills steady while boosting investment — using an approach last deployed by Blair to protect rail passengers.’

The anger comes after Thames Water said it will go bust by March if it does not get an emergency £3billion loan.

This would cost the average person £250 more a year, according to figures from campaign group We Own It.

What does the water bills rise mean for you?

This means that the average bill will rise by a total of £157 or 36%, on top of inflation, by 2030.

Water companies had campaigned for an increase of 40%, so this is even slightly under.

It comes as some 60,000 homes across Hampshire are without water due to a ‘technical issue’ at a Southern Water supply works.

Regulator Ofwat said the extra money would pay for a £104 billion upgrade of the sector to deliver ‘substantial, lasting, improvements for customers and the environment’.

Many companies are under pressure for polluting waterways, through not investing in correct infrastructure.

What have regulator Ofwat said about the water bills rise?

But chief executive David Black stressed that the 36% rise provides firms with ‘an opportunity to regain customers’ trust’ by using the cash to turn around their environmental record and improve services.

He added: ‘Water companies now need to rise to this challenge, customers will rightly expect them to show they can deliver significant improvement over time to justify the increase in bills.

‘Alongside the step up in investment, we need to see a transformation in companies’ culture and performance. We will monitor and hold companies to account on their investment programmes and improvements.

‘We recognise it is a difficult time for many, and we are acutely aware of the impact that bill increases will have for some customers. That is why it is vital that companies are stepping up their support for customers who struggle to pay.

‘We have robustly examined all funding requests to make sure they provide value for money and deliver real improvements, while ensuring the sector can attract the levels of investment it needs to meet environmental requirements.

‘This has seen us remove £8bn of unjustified costs compared with companies most recent requests. In addition, our approach to setting a rate of return has saved customers £2.8 billion.’

What has the reaction been?

A Water UK spokesperson said: ‘After a decade of cuts Ofwat has finally listened to public anger and agreed a much-needed quadrupling of investment in our aging infrastructure.

‘This will be the largest amount of money ever spent on the natural environment, and will help to support economic growth, build more homes, secure our water supplies and end sewage entering our rivers and seas. Each water company will now need to take time to assess what Ofwat’s decision means for them.

‘We understand increasing bills is never welcome. To protect vulnerable customers, companies will triple the number of households receiving support with their bills to three million over the next five years.’

But River Action UK, hit back at the rise and Charles Watson from River Action said: ‘It is a travesty that customers are now being forced to pay higher water bills, especially when these increases are directly the result of years of under-investment by the water industry.

‘Shareholders in the water companies must be laughing all the way to the bank. With customers now being forced to foot the bill to repair and upgrade the water industry’s crumbling infrastructure, the very people who have already benefited for years from huge dividend payments, will see the value of their assets increase in thanks to this customer funded investment.

‘The real question remains staring us unanswered in the face: when will those who have profited so rapaciously from decades of operational neglect, causing horrendous environment damage in the process, finally be held accountable and made to pay up for their totally irresponsible custodianship of these essential public services?’

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