Five UK water firms to hike bills by less than wanted after CMA ruling | Personal Finance | Finance
Five water companies have been told they will not be allowed to raise customer bills by as much as they had wanted following a review by the UK’s competition watchdog. Anglian Water, Northumbrian Water, South East Water, Southern Water and Wessex Water will be allowed to raise an additional £463 million in revenue, falling short of the £2.7 billion they had sought.
The additional funding is expected to lead to an average rise of 2.2% in bills for customers of the five water companies, on top of the 24% average increase they had already been approved by water regulator Ofwat. This represents less than the £556 million in extra funding, equivalent to an average rise of 3% to customer bills, that had been provisionally approved in October. The Competition and Markets Authority (CMA) said it wanted to balance minimising the impact on people’s bills with the requirement for suppliers to have sufficient funding to meet their environmental and drinking water quality legal obligations.
The regulator decided that additional funds were required to support their investments, but that the bulk of their funding requests had been rejected.
Kirstin Baker, chairwoman of the independent group appointed by the CMA, said: “We’ve rejected most of the bill increases water companies asked for but allowed limited extra funding where that’s genuinely needed, balancing concerns about affordability with the need to secure our water supplies and cut pollution.
“A significant part of this extra money reflects market movements since Ofwat’s decision.”
The five firms had requested permission to increase revenue through customer bills, arguing that Ofwat’s ruling left them unable to meet the regulatory obligations imposed on them.
This refers to a decision made in late 2024, when Ofwat said it would allow water companies to hike bills by an average of £157, or 36%, over the next five years to fund investment into deteriorating infrastructure.
The amount that customer bills are going up varies between suppliers.
