UK (Parliament Politics Magazine) – The Competition and Markets Authority approved five UK water firms to raise bills by £556m over five years, rejecting most of their £2.7bn request.
As reported by The Guardian, millions of English households will face higher water bills after the competition regulator allowed some increases but rejected most of the companies’ requests.
CMA’s approval of water bill hikes for UK suppliers
An independent panel appointed by the Competition and Markets Authority (CMA) has provisionally approved an extra £556m in charges for customers over the next five years. This amounts to just 21% of the £2.7bn originally requested by the water companies.
The five water firms, including Anglian, Northumbrian, Southern, Wessex, and South East, collectively serve 14.7 million customers. In February, the companies requested the CMA to permit higher bill increases than previously approved by Ofwat.
In recent years, water bills in the UK have sparked political debate, fueled by public anger over sewage polluting waterways.
What did Ofwat approve and reject in water bill requests?
Ofwat oversees charges of mostly privately owned English and Welsh water companies, reviewing prices on a five-year schedule.
The regulator announced that average household bills could rise 36% to £597 by 2030, aimed at funding essential infrastructure improvements.
According to Ofwat, firms may spend £104bn overall, covered by consumer payments, while the five water companies requested an additional £2bn, S&P Global Ratings reported.
Ofwat’s December rulings left Southern, South East, and Wessex with the largest gap compared to their initial requests.
Thames Water’s response to Ofwat’s pricing decision
Britain’s biggest water company, Thames Water, with 16 million customers, will review the decision closely.
The water company initially appealed, but stopped it while negotiating with Ofwat and lenders to reduce debt and avoid temporary government control.
Sources said Thames Water may request an extra £4bn, insiders say, claiming Ofwat’s price rules hinder pollution performance improvements.
What did Kirstin Baker say about water bill hikes?
Kirstin Baker, chair of CMA, said,
“We’ve found that water companies’ requests for significant bill increases, on top of those allowed by Ofwat, are largely unjustified. We understand the real pressure on household budgets and have worked to keep increases to a minimum, while still ensuring there is funding to deliver essential improvements at reasonable cost.”
What did Water UK propose about higher bills for big gardens?
New proposals could make households with large gardens or swimming pools pay more for water.
In April, Water UK, representing water and sewage firms, called for compulsory water metering. The proposal comes as part of a government-commissioned review of the sector.
At present, water meters are mandatory in regions like Cambridgeshire, classified as “water-stressed” by the Environment Agency.
Water UK has urged the government to introduce “block tariffs,” charging households more per unit of water if they use higher amounts. The plan would raise bills for households using more water, such as those with pools or large gardens.
All customers pay a fixed fee to water companies. Metered households are charged for the water they use, while unmetered households are charged based on their property’s cost.
DEFRA’s views on fixing the water industry
A spokesman for the Department for Environment, Food and Rural Affairs stated,
“We are committed to taking decisive action to fix the water industry. We have already delivered on our promise to put water companies under tough special measures through our landmark Water Act, introducing new powers to ban the payment of bonuses to polluting water bosses and bring tougher criminal charges against them if they break the law.”
They added,
“The Water Commission’s recommendations will mark the next major step in shaping future legislation to attract vital investment, accelerate the delivery of infrastructure, and restore public trust in the sector. The Government will carefully consider the Commission’s conclusions once received.”
Which water companies have the largest bill increases this year?
The firms with the largest bills increases this year in the UK include Southern Water, which saw a 47% rise, the highest among water firms.
Other companies faced smaller hikes, generally between 1% to 5%, as regulators reviewed prices to address infrastructure needs. These increases are part of a broader trend in utility price rises driven by factors like inflation pressures.
The UK’s national average water bill for 2025-26 is forecast at £603, up 26% (£123), around £10 extra per month.
