Thames Water and Wessex Water given provisional go-ahead to increase bills
Thames Water and Wessex Water are among five water firms given the provisional go-ahead by the industry watchdog to hike bills further as part of plans allowing suppliers to spend an extra £3.4bn, reports BritPanorama.
Ofwat revealed in its draft determination that five of 13 suppliers across England and Wales are set to be permitted to increase charges for customers to invest in upgrades to cope with new housing and data centres, while addressing contaminants to ensure the safety and reliability of drinking water.
Debt-laden Thames Water is one of the firms provisionally allowed to increase customer bills between 2027 and 2030, alongside Severn Trent Water, Southern Water, Wessex Water, and South East Water.
Thames Water serves a significant area, including London, the Thames Valley, Oxfordshire, Berkshire, Wiltshire, and Gloucestershire. Wessex Water, on the other hand, covers Dorset, Somerset, Bristol, most of Wiltshire, and parts of Gloucestershire and Hampshire.
This decision follows a three-month review by Ofwat, with the 13 firms initially requesting a combined investment of £4.3bn.
Ofwat will consult on this draft decision until September 24, with a final verdict due in December.
Helen Campbell, executive director for delivery at Ofwat, stated: “The newly agreed funding will help unlock much-needed new housing development and boost business growth across a range of sectors, as well as improving drinking water quality and the removal of PFAS and forever chemicals.”
Campbell added, “We will track performance to ensure companies are delivering the expected improvements for customers and the environment. If they don’t, expenditure can be clawed back.”
Environment Secretary Angela Eagle acknowledged the public’s concerns, stating: “I know that households across the country are watching every pound and I share their frustration that years of underinvestment and toothless regulation has led to this.”
Eagle emphasized that funds would be earmarked for infrastructure improvements and pledged to fundamentally reform the water sector to better serve the public while maintaining lower bills and improving standards and performance.
This announcement comes just days after Thames Water sparked outrage by approving a delayed £1m “golden handshake” for its chief financial officer and agreeing to controversial retention payouts for senior executives amid its financial struggles.
The company faces a substantial debt of more than £20bn.
The decision to allow increased charges reflects ongoing challenges within the UK water sector, particularly for industry leaders like Thames Water. With significant public scrutiny, the focus will now shift to whether these firms can deliver the promised improvements while managing financial obligations. As the consultation period unfolds, stakeholders will be keenly observing the outcomes.
