Water Bill Hike To Fund Infrastructure Investments?
It’s possible that annual water bills could increase by £156 a year by 2030 if water suppliers in England and Wales are successful in their petition to industry watchdog Ofwat, seeking approval on plans to drive up bills to cover the costs of infrastructure upgrades and reduce sewage discharges.
The industry has suggested that this move will mean that infrastructure spend would almost double to £96 billion, the BBC reports, which in turn would mean that the country’s water supply would be secured for the long-term future.
Under the proposals, bill increases would vary between different water suppliers, with individual investment plans submitted to Ofwat for the 2025-2030 period. Charges would be increased gradually, rising by an initial £84 in 2025 to hit £156 extra come 2030.
Trade association Water UK said that “the most ambitious modernisation of sewers since the Victorian era” is now in the officing, with leaks reduced by a quarter by the end of the decade compared to 2020. A new reservoir is also being planned, the first one in 30 years.
Furthermore, plans are in place to reduce sewage spills into rivers, lakes and streams by over 140,000 a year by 2040.
These plans are now due to be reviewed by Ofwat, with public meetings to be held throughout October and November to ensure that customers can make their opinions known. A draft version of its response to each plan will be published by the watchdog in May next year, with a final decision on charges expected to be announced in December.
Criticism
Critics of the plans argue that customers shouldn’t have to deal with rising bills, given that water companies haven’t made adequate investments in infrastructure since privatisation over 30 years ago, with shareholders raking in the profits instead.
Feargal Sharkey, clean water campaigner, appeared on the BBC’s Today show, describing the proposals as a “breathtakingly catastrophic strategy”, noting that Ofwat had already said that water firms had been given sufficient money to develop and maintain a sewage system “capable of properly dealing with our sewage”.
Interestingly, it was reported at the end of September that the majority of water and wastewater companies across England and Wales had underperformed in 2022/2023 in areas including pollution incidents, leaks and customer service.
Some £114 million is due to be returned to customers by water suppliers as a result, with Ofwat chief executive David Black saying that this is “very disappointing news” for all those who want to see the industry improve and do better.
He went on to note that it won’t be easy for suppliers to rebuild public trust, but a good starting place would be improved customer service and more focus on the environment.
That said, it seems that driving up bills in the face of such slow progress may not necessarily be the best way to go about increasing customer confidence in water firm capabilities.