Millions of households are poised to experience larger increases in their water bills as five companies have been granted approval to raise prices by more than initially reported. The companies involved are Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water, which contested that the original price hikes determined by the water regulator Ofwat were insufficient.
In December, Ofwat announced that water companies could raise bills by 36% over the next five years, averaging £157, to fund upgrades and reduce sewage discharges. Following an appeal by the companies in March, the Competition and Markets Authority (CMA) conducted an investigation.
The CMA has now sanctioned Anglian and Northumbrian to increase bills by an additional 1% beyond the initial announcement, while Southern, South East, and Wessex can raise bills by 3%, 4%, and 5%, respectively. These companies collectively serve seven million households in the UK.
The CMA noted that the firms sought to raise bills to generate an extra £2.7 billion in revenue but only approved 21% of this request, amounting to an additional £556 million in revenue. Consumer groups have cautioned that households already faced substantial bill hikes in April, with the average water bill increasing by around £123 annually.
Kirstin Baker, who led the independent expert group appointed by the CMA to assess the price controls, stated that the companies’ requests for significant bill increases, on top of those permitted by Ofwat, were largely unjustified. The aim was to minimize increases while ensuring funding for essential improvements at reasonable costs.
Mike Keil, Chief Executive of the Consumer Council for Water (CCW), expressed concern over further bill increases following the recent surge in water bills in April. Keil highlighted missed opportunities to reduce financing costs for the companies, potentially lowering bills by £41 annually.
Water minister Emma Hardy acknowledged public frustration over bill rises and emphasized the need for water companies to offer support to those struggling to pay. Hardy underscored the government’s focus on investing in infrastructure upgrades and creating a robust regulatory framework to enhance trust in the water system.
While switching water providers is not an option, there are ways to save money on water bills. Simple measures like reducing shower time by a minute, ensuring taps are turned off when not in use, and considering a water meter installation can help cut costs. Martin Lewis recommends assessing the benefit of a water meter using the CCW website’s calculator.
Furthermore, households can access free water-saving devices through Save Water Save Money, such as regulated shower heads, tap inserts, and cistern bags to reduce water consumption. Stay informed on money-saving tips and exclusive offers by subscribing to the Mirror Money newsletter.
