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

The typical water bill will rise by an average of £86 from April 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 infrastructure upgrades and to reduce sewage discharges, Ofwat said.

The cost increases overall 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 provided “much-needed” investment for the sector.

Over the next five years, the increases in water bills will average out to £31 per year, but Ofwat said firms are expected to hike tariffs by a higher amount in the first year.

However, the bill hike averages have been calculated without inflation, meaning actual bills are likely to be higher.

The water industry has faced fierce criticism in recent years over pipe leaks and sewage discharges into rivers. Many firms, including the UK’s largest supplier, Thames Water, are struggling financially.

David Black, Ofwat chief executive, told the BBC the investment will “deliver significant reduction in sewage spills, further reductions in leakage, and drive up service for customers”.

A total of £104bn is to be spent on upgrades for the sector, which Ofwat said would deliver “cleaner rivers and seas and secure long-term drinking water supplies for customers”.

Bill hikes varies by region. Southern Water customers will be hit by the biggest increase, with bills going up 53% – to £642 on average – by 2030. Wessex and Northumbrian Water bills will rise by the smallest amount: 21%.

The announcement of bills rising for Southern Water households comes as supplies to thousands of homes are currently disrupted, with more than 58,000 properties hit.

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.

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

The Consumer Council for Water, which helps resolve customer complaints, said the bill rises “may be less than what water companies wanted but they are still more than what many people can afford”.

It said customers would be “hit particularly hard from April”.

Mike Keil, its chief executive, said at least two in five households in England and Wales “will struggle to afford” these increases.

Social tariffs which give a discount on bills are available for people who need help.

But who actually gets financial help is “a roulette”, he told the BBC’s Today programme, because each company sets its own criteria for who qualifies.

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 the rise “may not look very much”, but added it would “squeeze people’s budgets and then it will have a knock on effect on their other bills”.

“People are really struggling with their water bills. It doesn’t tend to be what they come in for, but when we go through their finances we’ll see that water is generally an issue, and what we do find is that it’s very often the first bill they won’t pay,” she said.

Help is at hand for people who are struggling, including social tariffs offered by water companies, but they are not always aware of it, she added.

“If people contact their water companies there’s actually quite a lot of help that they can give, particularly if they’re on a low income, or if they have a disability,” Ms Newey said.

Rebecca Sinker, member of the Clean Water Action Group in Hastings, said the group was “angry” about costs going up, arguing the water company there, Southern, 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 it can not be used for water company executive bonuses.

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

He added that water firms had been allowed to “divert customers’ money to line the pockets of their bosses and shareholders”.

Liberal Democrat environment spokesperson Tim Farron said successive ministers “have 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.