Water bills to be cut by £50 over five years under new plans

Edmund Heaphy
Finance and news reporter
Regulator Ofwat has unveiled new changes to the water regime. Photo: Getty

Water bills in England and Wales are set to fall by an average of £50 over the next five years under a “major” investment package unveiled by regulator Ofwat.

Under the plan, water companies will have to invest an additional £6m every day to improve the environment, as well as the service they provide to customers.

The companies will be tasked with cutting pollution incidents by more than a third, reducing supply interruptions by almost two-thirds, and helping some 1.5 million customers who are struggling to pay their bills.

They have also been told to cut leakages, in a move that could save enough water equivalent to the needs of the combined population of Manchester, Leeds, Leicester, and Cardiff.

While customers across England and Wales will see their water bills fall by an average of £50 over the next five years, the reductions will vary significantly.

Customers in Hafren Dyfrdwy, for instance, will save £7, while those who get their water from Northumbrian Water will save as much as £110.

In total, Ofwat said the additional investment would amount to £12bn over the period — a figure that does not include the “business-as-usual” investment that water companies had already been planning.

“The package we are unveiling today signals a brighter future for customers, with better services, a healthier natural environment, and lower bills,” Ofwat chief executive Rachel Fletcher said.

The announcement affects 14 of the 17 companies in England and Wales, and comes as part of Ofwat’s far-reaching price review of the sector.

The other three water companies — Severn Trent, South West Water, and United Utilities — have already been “fast-tracked” through the price review, Ofwat said, in recognition of their “high-quality” plans for the next five years.

“These are seriously stretching goals for the sector, but we know they can be achieved,” Fletcher said.

“We have seen three water companies leading the way and we now want the rest to show the ambition and drive to deliver this new era for customers and the environment.”