Five water firms are to be provisionally allowed to raise their bills by between 1 per cent and 5 per cent more than previously granted by regulator Ofwat, the competition watchdog said today.
Five companies – Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water – argued that Ofwat’s original decision left them unable to meet the regulatory requirements set out for them.
An independent group of experts appointed by the Competition and Markets Authority (CMA) said Anglian and Northumbrian should be allowed to increase their bills by a further 1 per cent, Southern by 3 per cent, South East by 4 per cent and Wessex by 5 per cent.
The CMA said a provisional decision allowed for 21 per cent, or an additional £556 million in revenue, of the total £2.7 billion the five firms requested.
Kirstin Baker, who chaired the independent group of experts appointed by the CMA to consider the price controls, said: ‘We’ve found that water companies’ requests for significant bill increases, on top of those allowed by Ofwat, are largely unjustified.
‘We understand the real pressure on household budgets and have worked to keep increases to a minimum, while still ensuring there is funding to deliver essential improvements at reasonable cost.’
The CMA said the extra money would fund more resilient supply, reduce pollution and reflect increased financing costs.
In December, Ofwat said it would allow water firms to raise bills by an average of £157, or 36 per cent, over the next five years to help finance investment into crumbling infrastructure.
Water firms will be provisionally allowed to raise their bills by more than previously granted
| Water company | Average water bills under Ofwat’s price review for 2025-30 | Average water bills requested by the 5 water companies | Average water bills under CMA’s provisional decision |
|---|---|---|---|
| Anglian Water | £591 (20% higher than bills for 2024 to 2025) | £649 (10% increase compared to Ofwat’s decision) | £599 (1% increase compared to Ofwat’s decision) |
| Northumbrian Water | £488 (16% higher than bills for 2024 to 2025) | £515 (6% increase compared to Ofwat’s decision) | £495 (1% increase compared to Ofwat’s decision) |
| South East Water | £274 (18% higher than bills for 2024 to 2025) | £322 (18% increase compared to Ofwat’s decision) | £286 (4% increase compared to Ofwat’s decision) |
| Southern Water | £620 (48% higher than bills for 2024 to 2025) | £710 (15% increase compared to Ofwat’s decision) | £638 (3% increase compared to Ofwat’s decision) |
| Wessex Water | £594 (17% higher than bills for 2024 to 2025) | £642 (8% increase compared to Ofwat’s decision) | £622 (5% increase compared to Ofwat’s decision) |
| CMA table contains forecasts of average water bills – actual bills will vary according to factors such as average customer water consumption and company performance. Prices adjusted for inflation using CPIH for 2022/23. Water bills for South East Water do not include the cost of wastewater services as it is a water-only company | |||
But in March, Ofwat formally referred requests from the five companies for a redetermination of their bill increase allowance after they argued that the decision left them unable to meet the regulatory requirements set out for them.
This started a six-month period for the CMA to consider their appeals.
Water minister Emma Hardy said: ‘I understand the public’s anger over bill rises – that’s why I expect every water company to offer proper support to anyone struggling to pay.
‘We’ve made sure that investment cash goes into infrastructure upgrades, not bonuses, and we’re creating a tough new regulator to clean up our waterways and restore trust in the system.
‘We are laser-focused on helping ease the cost of living pressure on households: we’ve frozen fuel duty, raised the minimum wage and pensions and brought down mortgage rates – putting more money in people’s pockets.’
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