(qlmbusinessnews.com Wed. 23rd Oct, 2024) London, UK —
Ofwat to Approve Bigger Water Bill Hikes as Industry Faces Rising Costs
Water bills in the UK are likely to increase more than initially predicted over the next five years to cover rising costs and fund essential infrastructure investment, according to sources close to the situation.
Regulator Ofwat is currently reviewing how much water companies will be permitted to raise their bills. In July, the watchdog provisionally agreed to allow bills to increase by an average of £19 per year from 2025 to 2030, which would amount to a total rise of £94 or 21% over the period. However, it is now expected that bills may rise even higher, although the exact figures remain unclear. Ofwat is set to make its final decision later this year.
The anticipated increases come at a time when the water industry is under significant pressure. The government is expected to unveil major reforms this week, marking the most substantial changes to the sector since its privatisation in the late 1980s. These reforms aim to shield customers from the impact of rising bills while addressing the urgent need for investment to accommodate population growth, ageing infrastructure, and the effects of climate change.
Water companies across the country are facing challenges, with the July proposals showing significant variation in the permitted bill increases for different firms. Southern Water had the highest proposed rise of 44%, while Affinity Water was given a modest increase of just 6%.
Thames Water, the largest water company in the UK, was initially allowed to increase bills by 23%. However, it has since indicated it requires a 59% rise to continue operating. Earlier this year, the company’s shareholders refused to inject the promised funds, citing the unfeasibility of making profits under the current bill levels.
One of the key reasons for the anticipated higher bill increases is the rising cost of financing.
The full list of water companies and their increases are as follows.
Southern Water £603 up by 44%
Hafren Dyfrdwy £524 up by 32%
Dŵr Cymru £603 up by 29%
Yorkshire Water £537 up by 25%
Severn Trent Water £496 up by 23%
Thames Water £535 up by 23%
United Utilities £536 up by 21%
Portsmouth Water £135 up by 18%
South Staffs Water £183 up by 14%
Anglian Water £557 up by 13%
South West Water £561 up by 13%
Northumbrian Water £460 up by 11%
South East Water £248 up by 8%
Affinity Water £203 up by 6%
Wessex Water £497 down by 2%
And SES Water £187 down by 15%
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