Water companies and regulators are at odds over a £16-billion cut in infrastructure spending, while households see their water bills rise by £94.
Ofwat is accused of sabotaging efforts to clean waterways, after it trimmed investment plans for water companies following an initial proposal to increase bills by £144.
Water UK spokesman said: “As a result, we will have to block more homes, our rivers will recover slower, and we won’t be able to cope with the impending water shortages.”
The industry group stated that Ofwat would “repeat the mistakes of the previous” if it did not reconsider its plan. According to industry sources, £2 billion was cut from the budget for upgrading outfalls which spill sewage.
Ofwat retaliated and accused the water industry group of “posturing”. “We are absolutely not in agreement. David Black, Ofwat’s chief executive, said: “We have approved every scheme to deal with storm overflows and every environmental investment program.”
He said that the regulator believed improvements to sewage works and other wastewater-related infrastructure could be delivered at a lower cost than some firms suggested.
Severn Trent considers plans by Wessex Water, United Utilities and others for new storm tanks that will curb sewage spills to be very expensive. Some companies had proposed spending up to three times more than others on the storm tanks. “It is just a posturing of a trade group. “Our determinations allow the sector to reduce sewage spills faster and further,” Black said.
Ofwat has approved an investment record of £88 billion by water companies between 2025 and 3025, which is £16 billion less that they originally proposed. The new infrastructure will reduce sewage spills from England and Wales to 301,000 by 2030, down from 535,000 in the year 2021. The number of raw sewage discharges in rivers and seas reached a record high last year.
On Thursday, Prime Minister Sir Keir starmer said: “I do not want bills to punish people so much.” We will then have a plan in place to deal with this issue, both in terms of the governance of water.
Rachel Reeves said that the average increase of 21 per cent in water bills between 2030 and 2050 was “bitter pill”.
She said, “This is a reflection of 14 years of Conservative failure to invest in order to reduce pollution and ensure that families do not struggle with the cost-of-living crisis as they have done.”
Some areas of the country will see much higher increases than the national average. For example, Southern Water customers can expect to pay an extra £183 and Yorkshire Water customers £107 over the next five-year period. Thames Water customers who were facing the largest increases in the industry — an additional PS191 per year — will now see a £99 increase. The average water bill is £448.
Consumer Council for Water stated that households will still feel “upset” and “anxious” over the rising bills. The Consumer Council for Water said that the trust in water companies had never been lower. This will not change until consumers see and feel a difference.
Feargal Sharkey is a former Undertones member and water activist. He claims that customers are being charged twice. Ofwat denies this. He said it was “an appalling and contemptuous attitude” to expect customers to be fleeced again for services they already paid for but didn’t receive the first time. Sharkey warned that it may take much longer for rivers to recover than 2030.
Ofwat admitted that it would take several years before waterways improve. It will take some time for things to change. Black stated that there are “hundreds of thousands of kilometers of sewers”.
The number of raw sewage discharges in the United States last year reached 464,000, a record high.
Steve Reed, the new environment secretary, stated that after meeting with 16 chief executives of water companies on Thursday he was happy they had agreed to Labour’s reforms. These include requiring firms to ringfence their spending on vital infrastructure, rather than bonuses, dividends or salary increases. Since 2019, water bosses received at least £26million in bonuses and incentives.
Susan Davy, boss of Pennon (South West Water’s parent firm), waived her bonus for the second consecutive year. Chris Weston, the new Thames Water chief executive, received a bonus of £195,000 for his first quarter.
Ofwat placed Thames Water under a newly created “turnaround supervision regime” on Friday. This will mean that the company is being closely monitored and it must produce a financial stability plan.
Black stated that the company could be split up in the future or floated on the stock exchange to gain access to more capital. Given the current state of the utility, a break-up is unlikely to happen for many years. It could be split into separate companies in London, the Thames Valley and for water supply and waste management.
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