Household water bills will rise by an average of £31 a year from April

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Household water bills in England and Wales will rise by an average of £31 a year over the next five years, regulator Ofwat has announced.

The increase is significantly higher than the expected average increase of around £20 a year per household, outlined in the regulator’s draft proposals in July.

Ofwat said the increase would pay for a £104bn upgrade of the water sector to deliver “significant, lasting improvements for customers and the environment”.

But despite the average increase figure of £31 a year, households will face a sharp average increase of £86 or 20 per cent over the next year, excluding inflation, with smaller percentage increases in each of the next four years.

The average bill will rise by a a total of £157 or 36 per cent over the next five years.

Ofwat chief executive David Black said: “Today is an important moment. It gives water companies an opportunity to regain customer trust by using this £104bn upgrade to turn around their environmental performance and improve services to customers.

“Water companies must now rise to this challenge, customers rightly expect them to demonstrate that they can deliver significant improvements over time to justify the increase in bills.

– Alongside the step up in investments, we need to see a transformation of the companies’ culture and performance. We will monitor and hold companies to account for their investment programs and improvements.

“We recognize that this is a difficult time for many, and we are very aware of the impact that bill increases will have on some customers. It is therefore important that companies increase their support for customers who have difficulty paying.

“We have carefully scrutinized all funding requests to ensure they are value for money and deliver real improvements, while ensuring the sector can attract the levels of investment it needs to meet environmental requirements.

“This has seen us remove £8bn of unwarranted costs compared to companies’ recent requests. In addition, our approach to setting a yield has saved customers £2.8bn.”

Tom MacInnes, head of policy at Citizens Advice, said: “These price rises will hit many households hard. While it is encouraging to see help for customers increasing, the current dysfunctional approach to billing support in this industry means people will continue to miss something.

“Ending the postcode lottery for social charges for water – cheaper rates for those who need them – is an important step to protect those struggling to keep up with rising bills.

Charles Watson, chairman and founder of campaign group River Action, said: “It is a travesty that customers are now being forced to pay higher water bills, especially when these increases are a direct result of years of under-investment by the water industry.

“Shareholders in the water companies have to laugh all the way to the bank. With customers now forced to foot the bill to repair and upgrade the water industry’s crumbling infrastructure, the very people who have already benefited from huge dividends for years will see the value of their assets increase thanks to this customer-funded investment.

“The real question remains staring us in the face unanswered: when will those who have profited so handsomely from decades of operational neglect, causing terrible environmental damage in the process, finally be held accountable and made to pay for their grossly irresponsible stewardship of these essential public services ?”

A spokesperson for WaterUK, the trade body representing Britain’s water companies, said: “After a decade of cuts, Ofwat has finally listened to public anger and agreed a much-needed quadrupling of investment in our aging infrastructure.

“This will be the largest amount of money ever spent on the natural environment, and will help support economic growth, build more homes, secure our water supply and stop sewage entering our rivers and seas. Every water company will now having to take time to assess what Ofwat’s decision means for them.

“We understand that bill increases are never welcome. To protect vulnerable customers, companies will triple the number of households receiving help with their bills to three million over the next five years.”

The Press Association.