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Water bills set to rise by £156 a year

Emma Lunn
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Emma Lunn

Water companies plan to invest £96bn in water and sewage infrastructure between 2025 and 2030 – but the investments will be funded by bill increases.

Water companies in England and Wales have submitted plans to the water regulator Ofwat, proposing the largest ever investment in the sector.

In total, water companies propose investing £96bn over the five-year period, a 90% increase on the current period. Water firms say this investment is essential to maintain the highest quality drinking water for a growing population, ensure the security of our water supply in the future and significantly reduce the amount of sewage entering rivers and seas.

Under the proposals, the money will be used to build 10 new reservoirs, cut leakage, reduce overflow spills, and install advanced technology at sewage works to remove over a million tonnes of phosphorus from rivers.

The plans will be subject to scrutiny and challenge by Ofwat before final decisions are made in December 2024. Ofwat has told companies that they must be ambitious in their plans to reduce pollution, while delivering value for money for bill payers.

Water bills will rise

According to Water UK, the investments will be funded by incremental increases to bills over a five-year period. The average bill increase in England is expected to be an additional £7 per month by 2025, compared with today. This is expected to increase to £13 per month in 2030.

As part of the plans, water companies have committed to more than doubling the number of households eligible to receive support – with 3.2 million households set to receive financial support – an increase of 2 million households.

David Henderson, Water UK chief executive, said: “These record-breaking investment proposals will secure our water supply as we deal with a changing climate and a growing population.

“While increasing bills is never welcome, this investment in our country’s infrastructure is essential to ensure the security of our water supply. Water companies are seeking regulatory approval to reduce overflow spills into rivers and seas as fast as possible and to doubling the number of households receiving support to pay their bills.

“Ofwat now needs to back these plans that are both ambitious and vital. Approving the plans is necessary so that we can provide the highest quality drinking water for a growing population, ensure the security of our water supply in the future and reduce the use of storm overflows as much as possible.”

David Black, CEO of Ofwat, said: “The water industry needs to deliver a step change in investment and performance to clean up our rivers and seas, while also helping to ensure that we can meet the challenge of climate change.

“Company business plans are an important first step in the price review process. Ofwat’s role is to forensically scrutinise their proposals, to ensure any increase in bills is justified, efficient and delivers significant improvements in river and bathing water quality. We will assess how companies are helping customers to afford any bill increase.

“As we work through the business plans we will continue to monitor companies’ performance, hold them to account for delivering improvements and push them to build meaningful plans to change.”