“What happened to the money we have already given the water companies? Why are we being asked to pay for a second time for a service they didn’t get the first time around? The fact is some of these firms cannot afford to service their debts.” Feargal Sharkey

Tracey Boles, Adam Vaughan www.thetimes.co.uk

Water bills will rise by about £84 a year on average as companies in England and Wales pump a record £96 billion into improving environmental standards and securing supplies, after widespread criticism.

The planned investment, which is nearly double the £51 billion being put into infrastructure in the present five-year regulatory period, will feature in the companies’ latest spending plans, to be published on Monday. They will be submitted to Ofwat, the industry regulator, which has a year to review them before giving its approval and determining the level at which bills will be set.

The investment in infrastructure over five years from 2025 is designed to tackle sewage overflows and reduce leakage as well as avoid water shortages.

The proposed spending means that water and sewerage bills, which average £448 a year at present, are likely to rise from April 2025. In England the expected rise is £7 a month, or £84 a year, according to estimates from Water UK, the industry body.

Ruth Kelly, the chairwoman of Water UK and a former Labour MP, said: “Bill rises are never welcome, but in keeping bills low, the environment and the security of our water supply has been paying the price. Those issues now need to be confronted head on.”

According to Water UK, investors will put up the money and the costs will be paid back in increments each year through bills. The process is designed to keep costs down and protects customers against paying up front for the billions needed to improve the UK’s ageing infrastructure. Under the proposals, the number of households receiving support with bills will more than double, to 3.2 million.

Feargal Sharkey, the former Undertones frontman and a water campaigner, said consumers were being asked to pay again for services that they had already funded. He said: “What happened to the money we have already given the water companies? Why are we being asked to pay for a second time for a service they didn’t get the first time around? The fact is some of these firms cannot afford to service their debts.”

Poor water quality

Number of Times readers who describe the water quality of the river/waterway in their local area as poor

Chart: The Times and The Sunday Times

Thérèse Coffey, the environment secretary, said: “Major improvements are needed to deliver clean and plentiful water now, and in the future . . . I have been very clear with Ofwat that customers should not pay the price for poor performance and they should use the full powers we have given them on behalf of consumers.”

If the spending plans are approved, they will pave the way for the development of up to ten reservoirs and up to nine desalination plants. New cross-country pipes will carry water from the wetter north to the drier south.

The Times Clean It Up campaign has been calling for tougher regulation of water companies and has urged the government to sufficiently staff and resource its regulators.

David Black, the chief executive of Ofwat, said: “The water industry needs to deliver a step change in investment and performance to clean up our rivers and seas, while also helping to ensure that we can meet the challenge of climate change.

“Company business plans are an important first step in the price review process. Ofwat’s role is to forensically scrutinise their proposals, to ensure any increase in bills is justified, efficient and delivers significant improvements in river and bathing water quality. We will assess how companies are helping customers to afford any bill increase.”

Ofwat added that bills must be “fair” and that customers would pay only for future investment, “not past company mistakes”. The regulator is putting in place an incentive regime which rewards companies for effective delivery, but hits those that fail to step up to the challenge with larger penalties.

Ofwat said: “As we work through the business plans we will continue to monitor companies’ performance, hold them to account for delivering improvements and push them to build meaningful plans to change.”

Water UK said the plans would also help create more than 30,000 new jobs and 4,000 apprenticeships for the sector, supply chain and wider economy.

The Times is demanding faster action to improve the country’s waterways. Find out more about the Clean It Up campaign.

We haven’t always got it right but the cost of inaction is huge

Ruth Kelly is chairwoman of Water UK

The water industry stands at a crossroads (Ruth Kelly writes). On Monday, all water companies in England and Wales will submit their five-year investment plans to the regulator, Ofwat, for consideration. Combined, this amounts to a £96 billion programme of investment in our water infrastructure — the biggest in the sector’s history. This is investment designed to put on a firm footing the security of our water supplies and start making significant inroads into tackling some of the environmental challenges we face. These plans will also create more than 30,000 new jobs, a near 50 per cent increase of the current workforce, and 4,000 apprenticeships for the sector, supply chain and wider economy right across the country.

We know that the industry has not got this right in the past. Over the past 30 years since privatisation, investment has risen by 90 per cent and we now have among the cleanest and safest drinking water in the world, pipes now leak over a third less water than they used to and the proportion of beaches rated excellent has risen sevenfold. But much of our infrastructure dates from the Victorian era and is nearing the end of its useful life. Despite the fact that investment rose significantly, it did not keep pace with the challenges from an ageing infrastructure, population growth and climate change. Nor did it meet public expectations on the environment.

Our population has grown 18 per cent since the 1990s. No reservoir has opened since, and sewage treatment has not expanded fast enough. With less investment than we needed, we have had the benefit of relatively low water bills. They have fallen by nearly 20 per cent in real terms since 2010.

Bill rises are never welcome, but in keeping bills low, the environment and the security of our water supply has been paying the price. Those issues now need to be confronted head on.

Ofwat will be poring over the plans before determining what is allowed, and at what price, before announcing its conclusions in the run-up to Christmas 2024.

People will rightly want to see results from any increase in bills that Ofwat allows. That is what the proposals aim to deliver. If approved, they will allow the development of up to ten new reservoirs and up to nine new desalination plants. New cross-country pipes will carry water from the wetter north to the drier south. And in England, companies aim to triple the current level of investment to reduce storm overflows of sewage into waterways. If approved by Ofwat, the health of England’s rivers will improve enormously, with 90 per cent less phosphorous from water companies by 2027 than in the 1990s, in line with the Environment Act’s ambitious targets for the most damaging pollutants. These are the kinds of new projects that companies want to deliver, the country needs and the public rightly expects.

Importantly, the regulator will ensure bills are no higher than needed to fund each improvement and will only approve them if they agree they are new, necessary and represent value for money. If improvements aren’t delivered, bills will automatically be reduced.

Water companies are determined that nobody is left behind. Firms in England will provide nearly a million more households with help on bills, with packages of support ranging from reduced tariffs to payment breaks.

The need for investment to upgrade and expand our system is true across the UK. Whether the infrastructure is owned by the state, as it is in Scotland or Northern Ireland, or by a regulated company, as in England and Wales, the picture is the same.

As an industry, we have apologised for not acting quickly enough on sewage spills and are planning our largest ever investment to put it right.

Ultimately, it is up to the regulator and our politicians to determine the level of investment they will allow and the extent to which they too are willing to reflect the public’s concerns. We cannot afford to shirk these difficult decisions any longer.