Water bills to rise by £86 on average next year, Ofwat says

The typical water bill will rise by an average of £86 from April for a year before easing, the industry regulator has said.

The steep rise is part of bill increases in England and Wales over the next five years to pay for supply upgrades and to reduce sewage discharges, Ofwat said.

The cost increases are higher than the regulator had proposed in July, but are lower than water companies had requested.

Water UK, the trade body for water firms, said the price increases would provide “much needed” investment for the sector.

Over the next five years, the average rise in bills will be £31 a year, but Ofwat said firms are expected to hike tariffs more in the first year.

However, the rises don’t include inflation, which means actual bills are likely to be higher.

Those rises are for water and wastewater firms. Water-only companies will raise bills by 22% to £234, Ofwat said.

The water industry has faced fierce criticism in recent years over leaks and sewage being pumped into rivers.

Some firms, including the UK’s largest supplier Thames Water, have financial problems, but there are also concerns some households will struggle to pay.

Ofwat chief executive David Black said the investment would significantly cut sewage spills, reduce leaks and ensure customers get a better service.

Some £104bn can be spent on upgrading water systems, which will mean “cleaner rivers and seas and secure long-term drinking water supplies for customers”, he said.

Bill hikes vary by region. Southern Water customers will be hit by the biggest increase, with bills going up 53% – to £642 on average – by 2030.

The news comes as supplies to more than 58,000 Southern Water customers are currently disrupted.

Wessex and Northumbrian Water bills will rise by the smallest amount, 21%.

Thames Water, which is struggling under a huge debt pile, will be able to charge customers 35% more, with annual bills going up to £588 in five years.

Bill rises are set by Ofwat for a five-year period, but firms can appeal against the decision by going to the Competition and Markets Authority.

Thames Water, which had asked to be allowed to put bills up by 53% to £667, said it was looking at the Ofwat decision.

Bills vary by region depending on how available water is, and whether people live in towns or the countryside, according to water industry dashboard Discover Water.

The bill rises do not apply to households in Scotland and Northern Ireland, where the water industry is nationalised.

In Wales, Dwr Cymru and Hafren Dyfrdwy will both increase bills by 42%, taking typical bills to £645 and £557 respectively.

Peter Perry, chief executive of Dwr Cymru, said there had been a “deficit over the last 15 years where bills haven’t risen”.

He said the firm would improve drinking water and 700km of rivers, and tackle sewage overflows, with £4bn of investment.

The Consumer Council for Water, which helps resolve customer complaints, said the bill rises were “more than many people can afford” with at least two in five households in England and Wales struggling to pay

Social tariffs, which give a discount on bills, are available but who actually gets financial help is “a roulette” because each company sets its own criteria for who qualifies, its chief executive Mike Keil said.

Citizens Advice warned that water bill increases could push people further into debt unless struggling households get more support.

Angela Newey, chief executive of Citizens Advice in north and west Kent, said “water is generally an issue” for people who are struggling, and “it’s very often the first bill they won’t pay”.

Michael in Langport told BBC Radio 5 Live that over the last 20 years his water bill had gone up from around £300 to just under £1,000 a year.

To try to control his costs, he got a water meter fitted this year.

“At the moment [it] has lowered my direct debits to a more manageable amount,” he said.

He called the latest rise in bills “an absolute scandal”.

“Where is it going to stop? What are we going to be ending up paying for water in the next 20 years? It’s just getting to be a joke.”

Rebecca Sinker, member of the Clean Water Action Group in Hastings, said the group was angry about costs going up, arguing that Southern Water had not been “keeping up with the infrastructure maintenance”.

“We don’t trust them to spend our money in the right way, and we can’t go anywhere else for our water. It’s a private company monopoly,” she said.

Ms Sinker said the group had been getting bacteria readings “way off the scale in terms of safety” in the sea, which was important for the area’s fishing and tourist industries.

In response, Southern Water said it worked closely with community groups, and that local bathing water quality had improved.

Environment Secretary Steve Reed said the government would “ringfence money earmarked for investment” so that it cannot be used for water bosses’ bonuses or dividends.

The government also intends to beef up customer compensation rules.

He said “our sewage system crumbled” under previous Conservative governments, and that the public were “right to be angry”.

Liberal Democrat environment spokesperson Tim Farron said successive ministers had “watched on while inept water companies have plunged themselves into unprecedented levels of debt, leaving customers to pay the bill”.

The Conservatives have been approached for comment.