Water firms ask for bill rises of between 24% and 91% – BBC News

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  • Author, Simon Jack & Oliver Smith
  • Role, Business editor and business reporter, BBC News

Water companies in England and Wales want bills to increase by between 24% and 91% over the next five years, according to figures compiled by the consumer watchdog.

Southern Water is asking for the biggest jump of 91%, according to the Consumer Council for Water (CCW), with South Staffordshire and Cambridge Water asking for the lowest rise of 24%.

Water firms say the increases will fund £100bn of spending over the period, which will include replacing ageing, leaking pipes and reducing sewage discharges into rivers and seas.

The latest bill hike demands come ahead of a crucial meeting this week when the industry regulator Ofwat will decide what companies can charge between 2025 and 2030.

Water companies have been heavily criticised for widespread leaks and the amount of sewage being discharged, which critics have blamed on under-investment in the country’s infrastructure.

Fewer than one in six customers considered water bill rises affordable, according to a survey Ofwat required the companies to conduct of their own customers.

The regulator is unlikely to approve the bill rises in full, but the BBC understands it is expected to agree to bill rises of at least half the amount the companies are requesting, and in some cases considerably more than half.

Mike Keil, chief executive of the CCW, said bill rises were “going to come as a massive surprise to people”.

“People do want to see improvements, they do understand that takes investment, but I think the scale of what’s being proposed here is going to come as a real shock and this is why water companies have double down on their efforts to explain what people are getting for their money,” he said.

How much do companies want to increase their bills by?

  • Southern Water – 91% increase to £915 a year by 2030
  • Thames Water – 59% to £749
  • Hafren Dyfredwy – 56% to £676
  • Severn Trent – 50% to £657
  • Wessex Water – 50% to £822
  • Yorkshire Water – 46% to £682
  • Dŵr Cymru – 43% to £702
  • United Utilities – 38% to £666
  • South East Water – 35% £330
  • Portsmouth Water – 31% to £157
  • Anglian Water – 29% to £682
  • Northumbrian Water and Essex & Suffolk Water – 26% to £530
  • Affinity Water 25% to £294
  • South Staffs & Cambridge Water – 24% to £221

Source: Consumer Council for Water

Estimate are for average bills. Costs will vary depending on a property’s rateable value

The latest figures from the CCW incorporate changes from the companies, the regulator Ofwat and other bodies including the Environment Agency since their five year plans for the period 2025-2030 were first submitted last October.

The proposed increases include a forecasted inflation rate of 2%, which is in line with the Bank of England’s target.

There is a very wide range of proposed bill rises, which reflects the very different challenges facing companies in different parts of England and Wales.

The very high figure at Southern reflects major upgrades to water infrastructure that has had serious problems.

Katy Taylor, Southern Water’s chief customer officer, said the company shared “everyone’s concerns about rising payments”, but added “the water needs of our water-stressed region pose a unique set of challenges which require significant investment”.

She said the cash from higher bills would be used to “reduce the use of storm overflows, safeguard water supplies for a rapidly growing population, and protect the environment”.

Southern Water is owned by Australian firm Macquarie which has faced fierce criticism for the period when it was Thames Water’s biggest shareholder.

In five of the 10 years it owned Thames, the company paid out more in dividends than it made in profits, while debt rose from £2.5bn to over £10bn in the same period.

Macquarie points out that it has recently injected £500m of additional cash into Southern Water.

Water UK, which represents suppliers, said bill rises were “never welcome” and added that water companies were “massively increasing the level of financial support they offer to customers who struggle to pay their bills”.

“Ofwat is currently scrutinising these plans and will only allow investment that is new, necessary and value for money. It will not allow water companies to spend money on anything for which they have already received funding,” the industry body said.

Ofwat will publish a preliminary report on the bill rises it expects to approve on 12 June with the figures finalised in December.

Water services are publicly owned in Northern Ireland and Scotland.

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