Millions of households are set to experience higher water bills than previously agreed upon, as five water companies raised concerns with the competitions watchdog. The UK regulator, Ofwat, had initially permitted 16 water companies to raise bills by an average of £157 over a five-year span from 2025 to 2030.
However, Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water contested that this allowance would not enable them to meet regulatory obligations. Subsequently, these firms approached the Competitions and Markets Authority (CMA) seeking approval to generate an additional £2.7 billion in revenue. Following an independent review, they have been granted an extra £463 million.
This adjustment is anticipated to lead to an average bill increase of 2.2% for customers, on top of the previously approved 24% rise. Notably, this figure is lower than the 3% increment provisionally sanctioned in October. The specific bill hikes vary among suppliers, with South East Water authorized to raise bills by an additional 4% to £284 annually.
Meanwhile, Southern Water and Wessex Water will see a 3% rise, reaching £641 and £614 per year, respectively. Anglian Water’s customers will experience a 2% increase to £602 annually, while Northumbrian Water will maintain current rates. Collectively, these companies serve approximately 14 million individuals.
The CMA emphasized the importance of balancing the impact on households with ensuring adequacy of funding for water suppliers. Conversely, a consumer advocacy group expressed concerns that the approved bill increases may still be unaffordable for many customers. Discontent is mounting among consumers due to escalating bills juxtaposed with issues like water leakages and pollution.
Chief executive of the Consumer Council for Water, Mike Keil, highlighted the need for a streamlined process allowing customers to challenge price hikes, aiming to rectify the existing power imbalance between water companies and consumers. Kirstin Baker, chair of the independent review group, underscored the delicate balance struck in granting limited additional funding to address genuine needs while considering affordability concerns.
The revised bill increments reflect the average yearly costs for customers. While customers cannot switch water providers, they can adopt water-saving practices to mitigate expenses. Simple actions like reducing shower time and utilizing water-saving devices can make a significant impact on bills. Additionally, obtaining a water meter could lead to cost savings, particularly for households with more bedrooms than occupants.