Millions of households face jump in water bills after regulator backs more price rises

Millions of households in England will see their water bills increase by even more than expected, after the competition regulator gave the green light for five water suppliers to raise charges to customers – but rejected most of the companies’ demands. An independent group of experts appointed by the Competition and Markets Authority (CMA) provisionally decided to allow the companies to charge customers an extra £556m over the next five years, it said on Thursday. That was only 21% of the £2.7bn that the firms requested. The five companies – Anglian, Northumbrian, Southern, Wessex and South East – together serve 14.7 million customers. The companies appealed to the CMA in February to ask for permission to raise bills higher than allowed previously by the industry regulator, Ofwat. Water bills have become the subject of significant political controversy in recent years in the UK, amid widespread disgust over leaks of harmful sewage into Britain’s rivers and seas. English and Welsh water companies are mostly privately owned, but the prices the local monopolies can charge customers are regulated by Ofwat over five-year periods. Ofwat in December said average annual household bills could rise by 36% to £597 by 2030 to help pay for investment. Ofwat said the companies could spend £104bn in total, paid by consumers. The five companies who appealed requested a further £2bn, according to S&P Global Ratings, a debt rating agency. Southern, South East and Wessex had the largest gaps between what they originally requested and what Ofwat granted in December. The result will also be carefully considered by Thames Water, Britain’s biggest water company with 16 million customers. Thames also appealed initially but has agreed to pause it while the utility and its creditors negotiate with Ofwat over a restructuring plan to try to cut its debt burden and prevent it collapsing into temporary government control. Thames is still considering requesting a further £4bn. People close to Thames Water had criticised Ofwat’s approach to the price determination, arguing that the company needed much more cash to turn around its performance on pollution.