OFWAT has limited the amount that Southern Water can increase customer bills by in the next five years.
Earlier in the week it was looking like OFWAT was about to approve a rise of almost 73 per cent over five years, taking the average bill to £726 per annum.
However, the regulator ruled on Thursday that Southern Water’s average annual water and wastewater bills can only increase by £183, from £420 to £603 by 2029/30.
It is however, the highest rise in England and Wales and double the average.
Water companies to be held accountable
Secretary of State for Environment Food and Rural Affairs, Steve Reed MP, also announced on Thursday a series of initial steps towards ending the crisis in the water sector.
The new Labour Government says these new measures represent a step change after years of failure to ensure the water industry cuts illegal sewage dumping and attracts major private-sector investment to upgrade infrastructure while prioritising the interests of customers and the environment.
Mr Reed met with water company Chief Executives to make clear that under this government, water companies will be answerable for their performance for customers and the environment.
He announced:
- He has written to Ofwat to ask them to make sure funding for vital infrastructure investment is ringfenced and can only be spent on upgrades benefiting customers and the environment. He also wants Ofwat to ensure that when money for investment is not spent, companies refund customers, with money never allowed to be diverted for bonuses, dividends or salary increases.
- Water companies will place customers and the environment at the heart of their objectives. The Secretary of State is clear that he expects companies to change their ‘Articles of Association’ – the rules governing each company – to make the interests of customers and the environment a primary objective.
- Consumers will gain new powers to hold water company bosses to account through powerful new customer panels. For the first time in history, customers will have the power to summon board members and hold water executives to account.
- Strengthened protection and compensation for households and businesses when their basic water services are affected. Subject to consultation, the amount of compensation customers are legally entitled to when key standards are not met will more than double. The payments will also be triggered by a wider set of circumstances including Boil Water Notices.
