Future water bill rises will be ‘unaffordable’ for most
Business@inews.co.uk
Plans by water companies to increase customer bills by as much as 70 per cent over the next five years will be “unaffordable” for most households in England and Wales, a study by the water consumer watchdog suggests.
Proposed increases could push annual water bills to above £800, according to the Consumer Council for Water (CCW).
Southern Water users may face the biggest increase of £337, or 70 per cent, by 2030, followed by Thames (£262, 56 per cent) and Wessex (£251, 53 per cent).
These figures take into account an estimated annual inflation rate of 2 per cent.
Industry association Water UK confirmed earlier this year that the average household water and sewerage bill in England and Wales will rise by about £27 to £473 from 1 April.
This is a 6 per cent average increase but regional variations and other factors – such as whether a customer is metered and how much water they use – means some households could face rises significantly above or below that.
An analysis of water company business plans by the CCW found that just 16 per cent, or one in six, customers believe that what is being proposed is affordable.
Water regulator Ofwat said its scrutiny of water company business plans remains “ongoing, and we will ensure that any increase in bills delivers significant improvements”.
The CCW found that the majority of people said that their bill is either unaffordable now, will be in the future, or they don’t know if they will be able to afford it.
“It’s a serious concern that such a small percentage of customers consider what the companies are proposing to be affordable,” CCW chief executive Mike Keil told the Financial Times.
Increased bills will hit customers harder in 2025-2030 than they would have done in previous price reviews, the CCW warned.
Several water companies have faced severe financial difficulties.
The challenges facing Thames Water, which has 16 million customers in London and the Thames Valley, was thought to be so acute that ministers have drawn up contingency plans to take over in an emergency.
Public anger has been growing following revelations over dumping sewage in rivers at the same time as underinvestment in water supplies, high pay for senior executives and hefty dividends to shareholders.
“It is paramount that customers see tangible improvements for their money. If they don’t, trust in the water sector will be further eroded,” a CCW spokesman said.