Households must fund sewage repairs, say water firms

THE water industry has refused to fix the sewage crisis unless improvements can be funded from increased household bills.

A £10billion plan announced by the water industry to reduce the amount of sewage spills will be funded from increased bills to last for decades if it is signed off by Ofwat, the regulator.

It came as Lawrence Gosden, the chief executive of Southern Water, became the fifth water industry boss to decline a bonus this year, increasing pressure on the remaining companies to follow suit.

“The £10billion is of a scale where it can only be sustainably funded by bills,” said Stuart Colville, director of strategy at Water UK, an industry body.

He added that for water companies to fund this from their own pockets would be “one of the largest charitable donations in the history of the planet”.

Anglian Water defended the need to raise bills yesterday, saying customers could pay an extra £91 a year for its entire investment programme, which includes around £12 for sewage spills.

“That money does have to come from somewhere,” Regan Harris, its spokesman, told BBC Radio 4’s World At One programme.

A decision on how much bills will rise is expected to be made in May or June next year, piling further pressure on the Conservatives in the run-up to an expected autumn general election. Downing Street said yesterday that the modernisation work should not “disproportionately affect consumer bills”.

The plan is expected to reduce spills by just over 10 per cent compared to last year, when there were around 300,000 sewage spills, according to Environment Agency data.

“The plans that have been set out today will of course need to go through the correct regulatory approval first to both ensure they deliver on the targets that we’ve set whilst not disproportionately affecting consumer bills,” a No 10 spokesman said.

The £10billion investment plan is part of the Government’s £56billion proposal to fix sewage spills by 2050, which it has said should cost bill payers an extra £12 between 2025 and 2030, and £42 a year until 2050.

Industry sources said yesterday that they expected the final figure to be “close” to the Government’s estimates, making it unlikely that Ofwat will refuse the investments.

The Government believes moving any faster to fix the problem before 2050 would put an unreasonable burden on consumer bills, as well as posing a challenge in terms of delivery because of supply chain and labour constraints.

Clean river campaigners expressed scepticism that the water industry would deliver on its promises after years of underinvestment.