Water companies across England and Wales have received provisional approval from the regulator, Ofwat, to increase customer bills by an additional £3.4 billion over the coming years. This funding is intended to address mounting pressures on aging infrastructure and environmental standards, including the mitigation of pollutants known as “forever chemicals.”
Nearly one-third of this newly approved funding is designated for maintaining essential water services. The remaining capital will support increased demand from new housing developments and data centers, as well as necessary environmental upgrades. Ofwat noted that while companies requested a total of £4.3 billion, some proposals were rejected during the review process.
The financial impact will vary by provider. Customers of five specific firms—Severn Trent Water, Southern Water, Thames Water, Wessex Water, and South East Water—face additional bill increases over the next two years, building upon hikes already announced in 2024. For instance, Southern Water plans to charge an extra £43 next year, while South Eastern customers will see a £1 increase in 2029. Eight other firms, including Anglian Water, Yorkshire Water, and United Utilities, would recover their additional costs through bills after 2030.
Prime Minister Andy Burnham criticized the move, describing the proposal as “real money out of family budgets at a time when they are struggling with the cost of living.” He acknowledged public frustration regarding ongoing supply interruptions and pollution, stating that unnecessary costs passed onto households would be challenged. “Where water companies seek to pass unnecessary costs onto households, they will be challenged,” Burnham added.
Environmental groups have been vocal in their opposition. Amy Fairman of River Action labeled the decision “an insult,” arguing that decades of insufficient investment have left the public paying for “leaks, pollution and soaring bills.” She called for greater public control over the sector, declaring, “No more blank cheques for failure.”
Kierra Box, a water campaigner at Friends of the Earth, echoed these sentiments, noting that rivers and seas remain heavily contaminated with sewage and chemicals despite previous price hikes. “Now ordinary people are being asked to foot the bill once again to pay for decades of water company inaction on upgrading our crumbling water infrastructure. It’s daylight robbery,” she said.
In defense of the increases, water companies maintain that significant investment is required to replace pipes, construct treatment plants, and build new reservoirs. They point to climate change as a primary driver of infrastructure stress, citing the increased frequency of heatwaves and heavy rainfall.
Ofwat Executive Director for Delivery, Helen Campbell, stated that the regulator would strictly monitor performance to ensure firms deliver expected improvements. “We will track performance to ensure companies are delivering the expected improvements for customers and the environment,” Campbell said, adding that “if they don’t, expenditure can be clawed back.”
The regulator’s decision is currently provisional, with a public consultation period underway. A final determination is expected in December. This funding mechanism allows companies to apply for additional resources for projects that were not identified during the standard five-year budget review cycle. Approved schemes include wastewater capacity in Newquay, data center support in Manchester, and accelerated work by Wessex Water to address PFAS pollutants.
Nearly a third of the extra funding provisionally approved for 13 water companies in England and Wales is earmarked for making sure water services are maintained.
The other eight water firms identified – Anglian Water, Dwr Cymru Welsh Water, Hafren Dyfrdwy, Northumbrian Water, Wouth West Water, United Utiliites, Yorkshire Water, SES Water – would recover their additional spending
This decision to allow increased charges comes on top of already-agreed bill rises that were negotiated with the water companies in 2024.
The increases will only come into effect if they are given final approval later this year.
The other eight water firms identified – Anglian Water, Dwr Cymru Welsh Water, Hafren Dyfrdwy, Northumbrian Water, Wouth West Water, United Utiliites, Yorkshire Water, SES Water – would recover their additional spending through customer bills after 2030.
Many consumers are angry at being asked to pay anything more against a backdrop of interruptions to supply sometimes lasting for days, and rivers, lakes and beaches too polluted to use safely.
As part of the outlined increase, Ofwat has approved funding for schemes including provision for new data centres in Manchester, additional wastewater capacity in Newquay and to bring forward work by Wessex Water to tackle PFAS pollutants, originally planned for 2030-35.
Ofwat said water companies had submitted a total of £4.3bn worth of requests, but some of their proposed extra spending had been rejected.
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