Water companies in England and Wales have just received the financial equivalent of a soggy high-five: permission to raise customer bills by an additional £3.4bn over the coming years. This is to cover the ever-growing pressures on infrastructure and the environment - because who doesn't love paying more for the privilege of leaking pipes and polluted rivers?
Nearly a third of this extra funding, provisionally approved for 13 water firms, is earmarked for simply keeping the water services from collapsing entirely. The rest will go towards meeting demand from housebuilding and data centres, and tackling those charming 'forever chemicals' (PFAS) that are apparently forever in our water and forever in our blood.
Andy Burnham, the Prime Minister (yes, that Andy Burnham - apparently he's been promoted), called the proposal 'real money out of family budgets at a time when they are struggling with the cost of living.' Environmental groups, meanwhile, described the decision as 'an insult.' Because what says 'we care about the environment' like making customers pay for the mess?
Customers of five companies - Severn Trent Water, Southern Water, Thames Water, Wessex Water, and South East Water - are facing additional bill rises over the next two years, on top of the increases already announced in 2024. The new hikes vary: Southern will charge £43 extra next year, while South East Water will only add £1 more in 2029. So at least someone's getting off lightly. But these increases only take effect if they receive final approval later this year.
The other eight firms - Anglian Water, Dwr Cymru Welsh Water, Hafren Dyfrdwy, Northumbrian Water, South West Water, United Utilities, Yorkshire Water, and SES Water - will recover their extra spending through bills after 2030. So, future generations get to foot the bill for today's inaction. How thoughtful.
Consumers are understandably furious about paying more when they're already dealing with multi-day supply interruptions and rivers, lakes, and beaches too polluted to safely use. But the water companies argue that these problems can only be solved by boosting spending to replace pipes, build treatment plants, and establish new reservoirs. And let's not forget climate change, which has made heavy rains and heatwaves more frequent, adding more pressure on the infrastructure.
Ofwat, the regulator, claims the extra spending will enable firms to support growth and better environmental outcomes, and ensure important upgrades aren't delayed. Helen Campbell, Ofwat's executive director for delivery, said: 'We will track performance to ensure companies are delivering the expected improvements for customers and the environment.' And if they don't? 'Expenditure can be clawed back.' So there's a vague promise of accountability.
This decision comes on top of already-agreed bill rises negotiated in 2024. The process allows firms to apply for additional funds for projects that weren't known about at the time of the last review. Among the approved schemes: new data centres in Manchester, additional wastewater capacity in Newquay, and Wessex Water bringing forward work to tackle PFAS pollutants originally planned for 2030-35.
But hold onto your wallets - this is only provisional. There's a public consultation period, with a final decision due in December. Ofwat said water companies submitted a total of £4.3bn worth of requests, but some proposed extra spending was rejected. So they didn't get everything they wanted. How generous.
Burnham said he understood why people are angry, as they've been asked to pay more for years while pollution incidents and leaks continued. 'Where water companies seek to pass unnecessary costs onto households, they will be challenged,' he said. Amy Fairman from River Action called it 'an insult,' while Kierra Box from Friends of the Earth went further: 'It's daylight robbery.' Strong words, but when you're paying for decades of inaction, they seem apt.
Water companies have failed to make sufficient investment over the last 30 years, leaving customers with 'leaks, pollution and soaring bills.' The solution? More public control, says Fairman. 'No more blank cheques for failure.' But for now, the blank cheque has been signed, and the customers are the ones cashing it out.