“When the water sector brags about ‘record investment’, what it really means is that bill payers, not water companies, are being forced to pick up the tab for decades of failure,” said River Action chief executive James Wallace.
River Action, supported by law firm Leigh Day, is challenging Ofwat’s Price Review 2024 (PR24), which will allow bills to rise by 36% between 2025 and 2030. Much of that increase – an average of £86 – was front-loaded into last April’s rise. The group argues that Ofwat has allowed companies to pass the costs of “mismanagement” on to consumers instead of funding upgrades from profits.
“The privatised, pollution-for-profit model has failed,” Wallace said. “Until water companies are owned and governed for public and environmental benefit, using long-term patient capital, we will keep seeing regulatory failure and polluted rivers.”
The latest rises are set to intensify pressure on household finances. James Smith, research director at the Resolution Foundation, said that the cost of living crisis was “far from over”.
“Although the average increase in water bills is set to be far less than the 27% last year, at 5.4%, this remains an unwelcome and unavoidable expense for households. The Government is right to keep the cost of living at the top of its agenda.”
Last week, the government’s Water White Paper outlined proposals including a new regulator with a chief engineer, tougher ‘MOT’-style checks on infrastructure, and a rollout of smart meters. Ministers billed the package as a “once in a generation” reform.
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But it fails to confront the industry’s underlying problems, campaingers said. It “simply entrenches a system that puts profit first”, said Rob Abrams, campaign manager at Surfers Against Sewage.
“Customers are yet again being slapped with even higher bills to prop up a crumbling system,” he said.
“Nearly a third of our water bills are swallowed up servicing the water company debt pile and shelling out dividends whilst we get sick from sewage.”
Since privatisation under Margaret Thatcher, water companies have extracted billions in shareholder profits while discharging sewage into rivers and seas. The White Paper does not address concerns over privatisation, instead promising “stability [for] investors”.
Consumer groups say affordability concerns are already mounting. Mike Keil, chief executive of the Consumer Council for Water (CCW), said complaints about the affordability of water bills had almost tripled in the past year.
“Further bill rises will compound people’s worries,” he said. “People support investment in improving services, but they are impatient for change and need to see compelling evidence their money is being well spent.”
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Keil called for stronger protections for households struggling to pay. “A stronger safety net is needed for those who simply can’t afford these bill rises,” he said, backing a universal single social tariff to replace what he described as an unfair “postcode lottery” of support.
He added that companies would provide support for “around 2.5 million households” through social tariffs, with average discounts of about 40%.
The increases in England and Wales follow the announcement that water bills in Scotland’s publicly run system will rise by an average of £42 a year (8.7%), taking the typical bill to £532.
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