Water companies are reportedly pushing for bills in England to rise by up to 40% under plans being drawn up to pay for the cost of dealing with the sewage crisis and the climate emergency.
The increases are due to be announced next year and could drive annual bills up from an average of £450 to £680 in parts of the country by the end of the decade, according to a Times report citing consultation documents.
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Most companies are asking the regulator to approve real-terms price increases of an average of 25% between 2025 and 2030, it reported. Thames Water is reportedly proposing rises of 20%, while Wessex Water wants to put up its prices by 30%.
The chancellor, Jeremy Hunt, was expected to discuss the bill increases in his meeting on Wednesday morning with the water regulator, Ofwat, and other watchdogs. He was also to ask regulators how they were cracking down on companies that may be exploiting rampant consumer inflation by raising prices.
The government is worried that the bill increases could be announced at around the time of the next general election.
An Ofwat spokesperson said: “Water companies are currently preparing their business plans for 2025-30. As part of these plans, companies will need to make considerable investment to deliver better services for customers and improve their impact on the environment – both of which are falling short.
“Companies will need to manage the affordability of their business plans for current and future customers and those less able to pay their bills, carrying out research to understand customers’ views. We will consider that evidence, along with a wide range of other considerations, as part of our price review process.”
The chair of the National Infrastructure Commission said the planned price increases are “probably not unrealistic”.
Sir John Armitt told BBC Radio 4’s Today programme: “By 2050, the Environment Agency and the water companies believe that about £50bn needs to be invested to get sewage overflows down to an acceptable level.
“We have previously estimated that £20bn needs to go into ensuring that we have sufficient water by 2050. So as you can see, you’re talking about very large sums of money to restore and enable our water infrastructure and our sewage infrastructure to be fit for purpose.”
Armitt added: “As a country, we have to decide what quality, what level of infrastructure we require. We then have to decide whether we want to pay for it, if we can afford to pay for it, we have to look after those who [have] limited resources and therefore cannot handle extra bills easily.”
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Water bills in England and Wales increased in April by the most in almost two decades, putting further pressure on budgets already strained by the soaring cost of energy and food. The typical water bill rose to an average of £448 a year from April, an increase of 7.5%.
Consumer groups said at the time that the increase of 8p a day could be a “tipping point” for the one in five customers who were already struggling to pay.
They also warned that some consumers could pay significantly more than the average because of regional variations and individual factors, such as whether they have a meter and how much water they use.
