Southern Water has proposed increasing customers’ bills by 84% by 2030. It is the highest increase submitted to Ofwat. Thames Water – the biggest water company in the UK – has proposed hiking bills by 53%, and Severn Trent by 46%.
Water firms say they need to make bills even more expensive to fund investment in systems to stop sewage outflows, pay high fines, and comply with regulations.
If the proposed price increases are agreed by the regulator, Southern Water customers could be paying an average annual bill of £772 by 2030, compared to £420 this year. This would make the firm the most expensive in the country.
Households have no choice about the firm they buy their water and wastewater services from – it’s a postcode lottery and there is no option to switch suppliers.
Ofwat will make its final decision for how much water bills can rise on 19 December. Its interim decision, made in July, said the average bill could rise £19 a year over five years (£94 in total), excluding inflation.
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But the latest proposed figures put forward by water companies are much high than this, with firms wanting to hike bills by 40% on average by 2029/30. This would put the typical annual bill at £615, compared to £439 now.
Of all 11 English and Welsh water and wastewater firms only one company, Wessex Water, is not seeking even higher bills than it first requested from the regulator in July.
New consultation launched
Ofwat has also launched a consultation asking for the views of its stakeholders on three new rules of remuneration and governance proposed in the Water (Special Measures) Bill.
The consultation will help the regulator in designing rules outlined in the Bill. These include rules that will prohibit performance-related pay for water company directors in certain circumstances, and require water companies to appoint and have in place people in senior roles only if they meet specified standards on fitness and propriety. Water companies will also be required to have arrangements to involve consumers in decisions that are likely to have a material impact on consumer matters.
Helen Campbell, Ofwat’s senior director for sector performance, said: “The Bill proposes strengthening Ofwat’s powers on remuneration and governance. It is an important opportunity to help us drive transformative change in the culture and behaviour of leadership in water companies over the long term, helping to rebuild public trust.
“We want to understand how we can design and implement the rules to ensure they deliver the best outcomes for customers and the environment. We’re keen to hear feedback from all our stakeholders on our initial ideas and how we can improve them and encourage interested individuals and organisations to share their views during the consultation period.”