Ofwat provisionally allows water firms to hike bills for infrastructure investment

The industry watchdog Ofwat has issued a draft determination provisionally allowing five water suppliers in England and Wales to increase customer bills to fund an additional £3.4 billion in investment by the end of the decade.

Thames Water, currently facing significant debt, is among the firms permitted to hike charges between 2027 and 2030. Other companies included in the provisional decision are Severn Trent Water, Southern Water, Wessex Water, and South East Water. The additional funding is intended to upgrade networks to support new housing and data centers, as well as to address drinking water safety by tackling ‘forever chemicals’ (PFAS).

The decision has drawn criticism from political figures. Andy Burnham stated that customers ‘cannot be treated as a blank cheque’ and noted that pollution incidents remain at record levels despite previous price increases. Environment Secretary Angela Eagle emphasized that ringfenced money must be spent on fixing infrastructure and that the sector requires fundamental reform to ensure better performance and cleaner waterways.

Ofwat will consult on this draft decision until September 24, with a final verdict expected in December. The regulator noted that if companies fail to deliver expected improvements, expenditure can be clawed back.