£114 Million Reduction in Water Bills Coming

Someone holding a glass underneath a running tap to fill it up
Author: Samuel Beckingham
Updated: Oct 04, 2023
3 minutes read

In the wake of the sewage scandal that has been enveloping Britain for years, it will come to the surprise of no one that Ofwat has set price caps for water companies to give back massive sums of money for underdevelopment. In terms of leakages, supply and reducing pollution, not a single water company reached the highest accolade available.

From 2024–2025, water companies will have to reduce what they charge customers in order to return £114 million for their shortcomings. Despite water bills increasing, they won’t be going up as much for certain households. This is because each water company is measured individually, and there’s no way to change your water supplier.

In the lowest category of “lagging” were Welsh Water, Southern Water, Thames Water, Anglian Water, Bristol Water, South East Water and Yorkshire Water. Of the remaining 10 water companies, they were all considered “average”, but not a single one was found to be “leading”. Now, because these companies have failed to reach targets, Ofwat has restricted them on what they are allowed to charge their customers.

Instead of giving money back as a lump sum, reductions in bills are to be set out instead. Five water companies are allowed to charge more, but trust in the sector has been falling rapidly. David Black, Ofwat Chief Executive, has stressed that regaining public trust for these companies will be an uphill struggle.

Since a lot of water company executives have been paying out dividends instead of upgrading pipework and treatment capacities, a lot will have to change quickly if UK residents are to be calmed. The most serious offender was Thames Water, who now has to pay back over £101 million to its 15 million customers.

You can see how all water companies compared in the interactive graph below.

Of the 4 water companies that have provided an adequate service, they are allowed to charge extra to their customers up to this maximum amount. Severn Trent Water, being the company that performed the most satisfactorily, is able to charge an additional £88 million to its customers.

UK rivers and seas are in dire straits after record amounts of sewage has been willfully discharged by these companies. Ofwat has stated that investigations are currently being performed for all 11 water and wastewater companies, and that 6 of them face live enforcement cases for sewage discharge. Even the accuracy of Welsh Water and South West Water’s findings is being called into question.

These reductions in water bills aren’t always good news. In 2023, a 7.5% increase was found in water bills, despite rebates of £150 million being given across 11 water companies. At the end of the day, prices are always going to rise, no matter the performance (or lack thereof) of water companies.

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