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The water consumer watchdog for England and Wales has warned companies’ plans to increase charges by up to 49 per cent by 2030 risk causing a new “crisis”, with one in four households already struggling to pay their bills.
The Consumer Council for Water (CCW) said companies raising bills by £100 to pay for much-needed infrastructure upgrades could push an extra 1.1mn households into water poverty.
The watchdog defines water poverty as a household spending more than 5 per cent of its income after housing costs on water bills; in 2021 it estimated that about 1.5mn of England and Wales’ roughly 25mn households were affected.
Ahead of an October deadline, water companies have set out plans to increase bills to pay for an estimated £70bn of investment by 2030 in draft submissions to water regulator Ofwat. The industry regulator will decide whether to approve the proposals by December 2024.
Water companies are required by Ofwat to consult consumers on any proposed price increases and have presented rises based on either this year or last year’s bills. The proposed bill levels do not include the future impact of inflation.
Household water bills have already risen by an average of 7.5 per cent this year, meaning they stand at £448 a year. But water companies, under public pressure over sewage outflows and leakage, are asking for big rises in bills for the next five-year regulatory period.
Based on current levels Southern Water, which serves 4.2mn customers across Kent, Sussex, and Hampshire, is proposing that bills rise by £222 — or 49 per cent — between now and 2030, according to its draft proposals.
Wessex Water, which provides water to 1.4mn people across the south west of England, has proposed an increase of £204, or 43 per cent, from now to the end of the decade.
Meanwhile, South East Water has said it plans to ask for an increase of between £57 and £76, equivalent to 31 per cent, between now and 2030 based on its current bills. The company’s 2.3mn customers across Kent, Sussex, Surrey and Berkshire were left without water for several days in recent months.
CCW chief executive Emma Clancy called for more support for households, saying: “Without a stronger safety net for people that cannot afford their bill, there is a potential crisis waiting further downstream.”
All water companies in England and Wales have social tariff schemes, which are designed to lower bills for struggling households. Companies have to consult customers to establish how much they are willing to contribute to subsidise less well-off customers.
Clancy said the capacity of some companies’ social tariffs was at present “stretched almost to its limit and yet we face the prospect of many more low-income households needing help to afford large bill rises in the future”.
Only a small number of companies pay towards the schemes from their own profits and more companies should follow suit, the CCW said, noting that some groups were consulting customers to see if they were willing to increase the level of cross-subsidy.
Katy Taylor, chief customer officer at Southern Water, said: “We regularly listen to the views of customers from across our region when we plan future investment in our network, and we discuss the possible impacts on bills.”
She added that the company offered “a minimum 45 per cent discount . . . to around 125,000 households” in need of support.
Wessex Water said: “Bill projections are based on early assessments of potential increases needed to meet regulatory and legal requirements. We are pressing for changes to allow greater use of more sustainable, lower-cost nature based solutions which would mean much smaller bill increases.”
Water UK, which represents the industry, said: “While it is clear bills will need to rise, the exact level is not yet known. These figures will change, because they are part of a consultation process with companies testing proposals with their customers.”
South East Water declined to comment.