Consumers face a sharp rise in water costs after the industry regulator gave permission for companies to increase bills to pay for stopping sewage spills and fixing leaking pipes.
Ofwat published its assessment of English and Welsh suppliers’ spending plans for 2025-30 on Thursday, ruling that they could put bills up by an average of £94 over the next five years – about a third less than the amount they had proposed. So how much are bills going up in your area and will it be enough to fund the investment your local water and wastewater company needs?
Thames Water
Ofwat took the unprecedented step of putting Thames into a form of special measures, meaning the debt-saddled supplier – which has said it could run out of money by next June without a cash injection from investors – will face increased scrutiny. Britain’s biggest water company will attempt to find new investors to fund the plan, as it aims to stave off a potential temporary nationalisation. It has been allowed to spend £16.9bn of a proposed nearly £22bn.
Southern Water
Ofwat also criticised Southern, saying its business plan “fell short” of minimum expectations, but still allowed it the biggest bill increase in the country. In 2021, Southern received a £1bn cash injection to save it from possible renationalisation, and it has been repeatedly criticised for sewage dumping in bathing waters. It will be allowed to spend £6.9bn, 12% lower than it proposed, but including expenditure on an underground pipeline to connect a proposed reservoir in Oxfordshire via the Thames, as well as a water recycling plant in Hampshire to tackle shortages in the region.
Severn Trent
Its business plan was rated “outstanding” and the company raised £1bn last year to help fund it. It asked for £12.9bn and will be allowed £11.8bn, including £4.8bn on new assets and service improvements, such as better water quality. It will also tackle storm overflows and reducing nutrient pollution.
United Utilities
The company – which has faced anger over sewage dumping in Windermere – will be allowed to spend £12bn of the £13.7bn it requested. Projects include a £1bn project to improve the Haweswater aqueduct, a huge water pipeline from the Lake District to Lancashire and Greater Manchester.
South West Water
In an area of the country characterised by beach sewage spills and increasing pressure on resources from population growth and tourism, the company is being allowed to spend £3.6bn, 7% less than proposed. It will work on projects including a £839m programme to build a new reservoir filled from Cheddar springs and the River Axe, and a separate reservoir scheme to repurpose a quarry in the Mendip hills.
Yorkshire Water
Ofwat said the company could deliver projects and services for £909m less than it asked for, allowing it to spend £7.3bn. Its work will include reducing sewage spills and cutting the amount of phosphorus entering rivers.
Northumbrian Water
Northumbrian is being allowed to spend £5.7bn, 7% lower than it proposed. The company has been criticised for refusing to release details about the scale of raw sewage discharges into the North Sea. Ofwat hopes Northumbrian can reduce pollution incidents by 30% by investing £882m to tackle storm overflows.
Wessex Water
Ofwat said Wessex’s plan showed a “poor level of ambition” and did not meet “quality expectations despite opportunities to make improvements”. The company has only been allowed to spend £3.7bn, 34% lower than its plan, and bills will fall by £12 on average. Wessex is tasked with cutting pollution incidents by 30%, a more stretching target than it had set itself. It will also develop a project to recycle wastewater from a treatment works via a wetland and the River Stour.
Anglian Water
Anglian has the green light to spend £9.4bn, 4% lower than it had proposed. It plans to spend £562m on storm tanks and infrastructure to increase storage capacity by the equivalent of 112 Olympic-sized swimming pools, in an effort to reduce storm overflows by 37%. It hopes to cut greenhouse gas emissions by 15%.
Dŵr Cymru
The company has been allowed to spend £5.2bn, 12% lower than proposed. Ofwat wants to see a 35% reduction in leakage and for it to help customers reduce their water use by 15%. A significant project will see Dŵr Cymru focus on improving the water quality in special area of conservation (SAC) rivers, of which there are nine in Wales – the Cleddau, Eden, Gwyrfai, Teifi, Tywi, Glaslyn, Dee, Usk and Wye.
Hafren Dyfrdwy
Ofwat will allow the Welsh company to spend £226m over the next five years, 14% lower than it proposed. It plans to replace 15,430 water meters with smart meters during the period, and is spending £2m to enhance its septic tank treatment site.
