Five water firms provisionally allowed to raise bills

By further 1% to 5%

Five water firms are to be provisionally allowed to raise their bills by between 1% and 5% more than previously granted by regulator Ofwat, the competition watchdog has said.

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%, Southern by 3%, South East by 4% and Wessex by 5%.

Southern Water had already been allowed a 53% increase to average bills over the next five years through the December ruling but had appealed for another 15%.

Anglian Water had been allowed 29% and asked for 10% more, while South East Water had been granted 24% and asked for a further 18%.

Wessex and Northumbrian – who were both allowed a 21% increase originally – asked for another 8% and 6% respectively.

The CMA said a provisional decision allowed for 21%, 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%, over the next five years to help finance investment into crumbling infrastructure.

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.”

Mike Keil, chief executive of the Consumer Council for Water (CCW), said: “Many customers are still trying to absorb the impact of April’s unprecedented rise in water bills, so any further increases will be very unwelcome.

“CCW’s own analysis suggests there was an opportunity to reduce these five companies’ financing costs, cutting bills by around £41 a year, but instead the CMA has chosen to increase their rate of return.

“There is a danger the customers of these companies will end up paying more, without seeing any additional improvements in return.

“Three of these five companies also have no plans to end water poverty by 2030 and yet their customers are being exposed to bill rises that at least 40% of households say they will struggle to afford.”

A spokesman for Water UK, which represents the industry, said: “If these decisions stand, the CMA has restored more than half a billion pounds in funding. This overturns the limits set by Ofwat for how much five companies can invest in their infrastructure.

“This process has unfortunately been necessary to secure the investment our economy and environment need.

“As the CMA acknowledges, the system requires urgent reform. The Government has said it will abolish Ofwat and set up a new regulator. The country needs that to happen as soon as possible.”

Published: 09/10/2025 by Radio NewsHub