Millions of households set to see unexpected water bill increases

Millions of households are set to see unexpected increases to their water bills after the industry watchdog gave suppliers the provisional go-ahead for an extra £3.4 billion in spending.

Ofwat said five of 13 suppliers across England and Wales are set to be given permission to increase charges for customers to pump in the additional investment by the end of the decade to help upgrade networks to cope with new housing and data centres, and tackle forever chemicals to ensure drinking water is safe and reliable.

Debt-laden Thames Water is one of the firms provisionally allowed to increase customer bills between 2027 and 2030, alongside Severn Trent Water, Southern Water, Wessex Water and South East Water.

It will likely stoke further anger, with the water sector repeatedly under fire over rising bills at a time of poor performance for sewage spills, water quality and supply failures.

The Consumer Council for Water (CCW), which represents customers, said the decision comes as households are already struggling with wider cost-of-living pressures, adding Ofwat needs to show “every pound of this additional £3.4 billion is necessary”.

Ofwat has already allowed water firms to put up bills by 36% between 2025 and 2030, with eye-watering increases seen in 2025 and another 5.4% on average from April this year.

Prime Minister Andy Burnham took aim at Ofwat’s draft decision and said customers “cannot be treated as a blank cheque”.

He said: “I understand why people are angry – I am too.

“The truth is customers have been asked to pay more for years, yet serious pollution incidents are at record levels and the pipes are still leaking.

“None of which is the billpayer’s fault, who should not be treated as a bottomless source of funding for other people’s failures.

“Customers cannot be treated as a blank cheque. Where water companies seek to pass unnecessary costs on to households, they will be challenged.

Prime Minister Andy Burnham took aim at Ofwat’s draft decision and said customers ‘cannot be treated as a blank cheque’ (Kin Cheung/PA)

PA Wire

“Our water industry has clearly not been working for people for far too long. That’s why this Government will be looking at how we can give the public more control and help keep bills as low as possible.”

The decision sees additional bill increases allowed for Thames Water – Britain’s biggest water supplier with around 16 million customers – which is on the brink of collapse as it sinks under a more than £20 billion debt mountain with creditors looking to secure a rescue deal to stave off temporary nationalisation by the Government.

South East Water, which is also set to increase bills for the investment programme, is another in the line of fire after a series of supply interruptions that has left thousands of households, businesses and schools without water.

Steve Hobbs, senior policy lead at the CCW, said: “Customers want investment that delivers cleaner rivers, more reliable water supplies and infrastructure fit for the future.

“But that ambition must be balanced against the fact many households are already really struggling with higher water bills and wider cost-of-living pressures.

“Ofwat needs to be able to show that every pound of this additional £3.4 billion is necessary, delivers value for money and is not funding work water companies should have already have paid for.

“Trust in water companies has never been lower and customers need to see their money is being well spent.”

The draft determination follows a three-month review by Ofwat, with the 13 firms originally putting forward requests for further investment of £4.3 billion.

A spokesman for Water UK, which represents suppliers, said: “This summer’s drought has shown exactly why new investment is so vital. This expenditure will help to safeguard services, unlock new homes and business growth, and replace ageing infrastructure.

“For most customers there will be no immediate impact on bills. Where bills will rise, we recognise any increase is difficult and help is available for anyone struggling to pay.”

Environment Secretary Angela Eagle branded regulation of the water sector “toothless” and pledged to “fundamentally reform” it.

She said: “I know that households across the country are watching every pound and I share their frustration that years of underinvestment and toothless regulation has led to this.”

Ofwat will consult on the draft decision until September 24, with a final verdict due in December.

Helen Campbell, executive director for delivery at Ofwat, said: “The newly agreed funding will help unlock much-needed new housing development and boost business growth across a range of sectors, as well as improving drinking water quality and the removal of PFAS and forever chemicals.

“We will track performance to ensure companies are delivering the expected improvements for customers and the environment.