Ofwat water bill increases that were not expected have drawn sharp criticism from the Prime Minister after the regulator provisionally approved an additional £3.4 billion in spending for five water suppliers across England and Wales. Andy Burnham warned the companies that customers ‘cannot be treated as a blank cheque’, as millions of households face further rises on top of increases already in the pipeline.
The move comes after Ofwat had already allowed water firms to raise bills by 36% between 2025 and 2030, with steep rises hitting customers in 2025 and a further 5.4% average increase from April this year. The latest provisional decision means five of the 13 suppliers in England and Wales, Thames Water, Severn Trent Water, Southern Water, Wessex Water and South East Water, could increase charges again between 2027 and 2030 to fund upgrades to water networks.
What the Ofwat water bill increases would pay for
Ofwat says the additional investment is intended to help networks cope with the demands of new housing and data centres, tackle so-called ‘forever chemicals’ (synthetic compounds known as PFAS that persist in the environment and in the human body), and ensure drinking water remains safe and reliable. The draft determination follows a three-month review, during which the 13 firms originally requested a combined further £4.3 billion in investment. Ofwat has provisionally reduced that figure to £3.4 billion.
The broader context is considerable. UK Water Bills reports that the PR24 regulatory settlement, which covers the 2025 to 2030 period, approved the largest investment programme in the history of the water industry, at over £104 billion. The additional £3.4 billion provisionally approved now sits on top of that already record-breaking commitment.
Not all companies face the same scale of rises. According to AOL, Southern Water customers are set to face the steepest increases among those affected, with bills expected to rise by £43 in 2027/28 and by a further £37 in 2029/30. The scale of those increases is likely to intensify scrutiny of a company that is already under pressure over its performance record.
Burnham and Eagle turn up the pressure on suppliers
Burnham was unsparing in his response. ‘The truth is customers have been asked to pay more for years, yet serious pollution incidents are at record levels and the pipes are still leaking,’ he said. ‘None of which is the billpayer’s fault, who should not be treated as a bottomless source of funding for other people’s failures.’
He went further, pledging that the Government would look at giving the public more control over the sector and helping to keep bills as low as possible. Environment Secretary Angela Eagle called existing regulation of the water sector ‘toothless’ and pledged to ‘fundamentally reform’ it. ‘I know that households across the country are watching every pound,’ she said, ‘and I share their frustration that years of underinvestment and toothless regulation has led to this.’
Separate to the Ofwat provisional decision, a BBC report has highlighted that an independent group of experts appointed by the Competition and Markets Authority (CMA) has also weighed in, saying that Anglian and Northumbrian could increase their bills by a further 1%, Southern by 3%, South East by 4% and Wessex by 5%.
Thames Water’s position makes the story particularly loaded. Britain’s biggest water supplier, with around 16 million customers, is carrying a debt of more than £20 billion and is on the brink of collapse, with creditors working to secure a rescue deal and stave off temporary nationalisation. Provisional permission to raise customer bills further is therefore likely to deepen the public anger already directed at the company.
South East Water is in a similarly difficult position. The company, also provisionally allowed to increase bills, has faced a series of supply interruptions that left thousands of households, businesses and schools without water.
The Consumer Council for Water (CCW), which represents customers, said the provisional decision arrived as households were already struggling with wider cost-of-living pressures. Steve Hobbs, senior policy lead at the CCW, said: ‘Ofwat needs to be able to show that every pound of this additional £3.4 billion is necessary, delivers value for money and is not funding work water companies should have already have paid for. Trust in water companies has never been lower and customers need to see their money is being well spent.’
Water UK, which represents suppliers, argued the investment was essential. A spokesman said: ‘This summer’s drought has shown exactly why new investment is so vital. For most customers there will be no immediate impact on bills. Where bills will rise, we recognise any increase is difficult and help is available for anyone struggling to pay.’
Ofwat will now consult on the draft decision until 24 September, with a final verdict due in December. Helen Campbell, executive director for delivery at Ofwat, said that if companies fail to deliver the expected improvements, ‘expenditure can be clawed back’.
