Water companies in England and Wales are proposing significant bill increases, ranging from 24% to 91%, over the next five years. These hikes are intended to fund a £100 billion investment in infrastructure improvements, including replacing old, leaking pipes and reducing sewage discharges into rivers and seas.
The Consumer Council for Water (CCW) highlights that Southern Water is seeking the highest rise at 91%, while South Staffordshire and Cambridge Water are asking for the smallest increase at 24%.
This week, Ofwat, the water industry regulator, will make a crucial decision on the allowed charges for the period between 2025 and 2030. Despite ongoing criticism of the water firms for leaks and pollution, Ofwat is expected to approve substantial increases, although likely less than the full amounts requested. A customer survey mandated by Ofwat revealed that fewer than one in six consider these rises affordable.
Ofwat's preliminary decision will be published on 12 June, and the final rates will be set in December. The proposed increases factor in an anticipated inflation rate of 2%, aligning with the Bank of England's target. The wide range of requested increases reflects the diverse challenges faced by different water companies across the regions.
The focus on Southern Water is particularly intense. Owned by Australian firm Macquarie, which has been criticised for its previous management of Thames Water, Southern Water's requested increase is driven by the need for major infrastructure upgrades. During its ownership of Thames, Macquarie paid more in dividends than its profits in five out of ten years, while debt soared from £2.5bnto over £10bn.
Unlike England and Wales, Northern Ireland and Scotland's water services are publicly owned, exempting them from such private sector financial pressures.
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