Water bills to rise by an average of £31 a year over next five years, Ofwat says

Household water bills in England and Wales will increase by an average of £31 a year over the next five years, regulator Ofwat has announced.

The proposed bill rise is significantly higher than the expected average increase of around £20 a year per household, outlined in the regulator’s draft proposals in July.

Ofwat said the increase would pay for a £104 billion upgrade of the water sector to deliver “substantial, lasting, improvements for customers and the environment”.

Despite the average £31 a year increase figure, households will face a heavy average hike of £86 or 20% in the next year, excluding inflation, followed by smaller increases over the next four years.The average bill will rise by a total of £157 or 36% in the next five years.

Some water companies have been allowed to increase prices significantly. Southern Water customers will face a 53% increase and Severn Trent households will see their bills rise by 47%, before inflation.

This comes as around 60,000 people in South Hampshire are without water for a second day running following a fault at a Southern Water supply works.

Meanwhile, Thames Water has been handed an £18.2 million penalty for breaking dividend payment rules, Ofwat said.

Environment Secretary Steve Reed said “the public are right to be angry” and blamed the previous Tory government for the state of the water industry.

He said: “Under the Conservatives, our sewage system crumbled. They irresponsibly let water companies divert customers’ money to line the pockets of their bosses and shareholders.

“The public are right to be angry after they have been left to pay the price of Conservative failure.

“This Labour Government will ringfence money earmarked for investment so it can never be diverted for bonuses and shareholder payouts. We will clean up our rivers, lakes and seas for good.”

Ofwat chief executive David Black said: “Today marks a significant moment. It provides water companies with an opportunity to regain customers’ trust by using this £104 billion upgrade to turn around their environmental record and improve services to customers.

“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.

“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."

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Mike Keil, chief executive of the Consumer Council for Water (CCW), called for a social tariff and better support for Brits who will bear the financial brunt of the increase in bills.

“These bill rises may be less than what water companies wanted but they are still more than what many people can afford," explained.

“Customers will be hit particularly hard from April, with a large chunk of these increases frontloaded into next year – on top of inflation.

“We know at least two in five households will find these increases difficult to afford, but the support being offered by some water companies lacks ambition.

“The case for a single social tariff to end the current postcode lottery of support has never been more compelling.”

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