(Commonwealth_UK) In a recent announcement, several water companies—including Southern Water and Thames Water—have proposed even steeper increases to consumer bills than initially outlined earlier this year. The requests have emerged in the context of regulatory oversight from Ofwat, the water sector watchdog, which has been attempting to moderate these rises.
Ofwat’s latest figures project a 40% increase in the average consumer bill in England and Wales by 2030, resulting in an annual cost of approximately £615. This marks a substantial rise from the previous average of £439. Earlier in 2023, water companies had initially requested an average bill of £585, which already represented a one-third increase.
In July, Ofwat responded by reducing these proposed increases in its draft price review, suggesting an average bill of £535. However, following a consultation period, ten out of eleven water companies have now submitted revised requests that exceed their earlier proposals. These companies contend that enhanced investments are necessary for upgrading ageing infrastructure, including pipes, sewers, and reservoirs, to comply with regulatory demands from agencies such as the Environment Agency and the Drinking Water Inspectorate.
Ofwat’s update highlighted that some of the proposed bill increases are intended to accommodate adjustments to the anticipated rate of return for investors, a factor that raises concerns about the priorities of the water companies amidst widespread public discontent regarding sewage spills in the privatized water industry. A recent report by Ofwat indicated a mere 2% reduction in pollution levels since 2019, despite the industry’s commitment to a 30% reduction.
In light of these developments, the Labour Party has proposed stringent new regulations that could impose severe penalties on company executives who obstruct regulatory processes, including potential jail time of up to two years. However, these measures have yet to be implemented.
Among the most significant proposed increases is Southern Water’s request for an 84% rise for its customers in Sussex, Kent, and Hampshire. Currently engaged in emergency discussions to address a £15 billion debt crisis, Thames Water, the largest provider in the UK, has requested a 53% increase. Other notable requests include Severn Trent Water seeking a 46% increase, and Hafren Dyfrdwy in North Wales, with a proposed rise of 45%. Notably, Wessex Water is the only company not requesting an increase beyond its initial proposal.
In response to the rising costs, a spokesperson for Downing Street acknowledged the public’s reluctance to accept higher water bills. The government has pledged to allocate necessary funds appropriately within the sector. The spokesperson emphasized the government’s efforts to enact reforms aimed at improving the water industry, including the forthcoming Water Bill designed to address the ongoing issues of sewage management and infrastructure decay.
Ofwat will make its final decisions about the bill increases on December 19, after further negotiations with the water companies. The regulator will take into account the latest expenditure requests as part of its final review process, underscoring the critical balance between investment in infrastructure and protecting consumer interests.
