Water Suppliers Issue Call For Even Higher Bill Hikes

In July, industry regulator Ofwat announced that the average bill increases for water and wastewater companies would be £19 a year over five years, in order to pay for necessary infrastructure upgrades including new reservoirs, water transfer schemes, water mains pipe replacements and improvements to thousands of storm overflows around the country.

However, following a consultation period, water companies have once again applied to the watchdog to increase tariffs more than this to enable them to carry out these network upgrades. If approved, these latest requests would see average bills rise by 40 per cent between now and 2030, the Independent reports.

Southern Water, for example, wants to increase bills by 84 per cent, while Thames Water has submitted a request for 53 per cent rise. Wessex Water is the only supplier not asking for higher bills than previously requested.

However, at the start of the month (October), Ofwat published its annual water company performance report, showing that suppliers are now being hit with £157.6 million in penalties after failing to hit pollution and leak targets, with Thames Water accounting for over a third of these fines at £56.8 million.

At the time, Ofwat CEO David Black said: ““This year’s performance report is stark evidence that money alone will not bring the sustained improvements that customers rightly expect.

“It is clear that companies need to change and that has to start with addressing issues of culture and leadership. Too often we hear that weather, third parties or external factors are blamed for shortcomings.

“Companies must implement actions now to improve performance, be more dynamic, agile and on the front foot of issues. And not wait until the government or regulators tell them to act.

“As we look towards the next price control, the challenge for water companies is to match the investment with the changes in company culture and performance that are essential to deliver lasting change.”

Given the level of poor performance that’s becoming increasingly evident and the dire state of the nation’s waterways, it perhaps seems a little unfair that customers are being asked to bear the financial brunt of the upgrades, particularly when water suppliers continue to pay out record amounts in dividends to shareholders.

In July it was reported that, despite being heavily weighed down by £15 billion of debt, Thames Water paid out a total of £196 million in dividends in 2023.

It is issues such as these that have led to renewed calls for the water industry to be renationalised, but given that this would cost an estimated £99 billion, it is unlikely that this will take place.

In September, Defra minister Baroness Hayman told the House of Lords: “Given the significant costs attached, the government has no intention to nationalise water companies.”

The final decision on water companies’ plans to increase bills for the five-year period between 2025 and 2030 will be made by Ofwat in December.

How can businesses keep water costs down?

There’s no question that water bills are going to increase, it’s simply a matter of by how much. As such, implementing strategies now that will reduce your water usage and consumption will help save you money in the future, as well as improving your water footprint and making you more sustainable as a business.

The good news is that there’s a lot that can be achieved where water conservation is concerned, ranging from prioritising water leak detection and repair to rainwater harvesting, grey water recycling, raising awareness of water use among your workforce and investing in eco-friendly and efficient appliances.

The first step, however, is to have a water audit of your site carried out so that you can see how and where you’re using water. This will allow you to identify the most appropriate water-saving solutions, which can be adjusted over time in line with the evolving needs of your business.

You can also potentially save money on your bills by comparing business water suppliers and making the move to a different company, taking advantage of new deals and tariffs, as well as better customer service, bill consolidation and so on. If you’d like to find out more, get in touch with the SwitchWaterSupplier.com team today.