Millions face higher water bills as suppliers allowed £3.4bn extra spending
Summary
Water companies in England and Wales have been allowed to spend an extra £3.4 billion beyond previously approved budgets, which will lead to higher water bills for millions of households. The spending aims to support new homes, datacentres, and improve water quality but will increase bills by up to 53% in some areas by 2030.Key Facts
- Ofwat, the water industry regulator, allowed 13 companies to spend £3.4 billion extra out of £4.3 billion requested for 2024 due to unforeseen costs.
- The extra spending adds to a £104 billion investment plan already in place, which will raise water bills by 36% from 2025 to 2030.
- Five companies, including Southern Water and Thames Water, are permitted to increase bills more before 2030 to cover this extra spending.
- £1.2 billion of the new funds will safeguard water services and assets, and £477 million will support housebuilding and datacentre growth.
- The UK government plans to build 1.5 million new homes and develop AI datacentres, increasing demand for water and energy.
- An additional £34 million will be spent to reduce toxic chemicals in water after reports showed pollution in all English water bodies.
- Southern Water customers face the highest bill increase of 53% by 2030, while Thames Water customers will see a 35% rise partly due to previous fines.
- Ofwat will monitor water companies' performance closely and may recover costs if targets are not met.
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