Water bills are expected to increase by around 30% in the next five years, according to a significant report aiming to reform the troubled industry. Sir Jon Cunliffe, the former Bank of England chief, highlighted a substantial surge in customers’ bills in the past year. Water UK has cautioned that the national average water bills for the upcoming year (2025-26) are projected to go up by £123, equivalent to a 26% rise, approximately £10 per month.
Sir Jon emphasized on BBC Breakfast that there would be a real-term rise of over 30% in bills over the next five years due to various factors such as climate change, higher environmental standards, demographic pressures, and the need to update aging infrastructure. He noted the necessity to assist the most vulnerable and spread out the cost increment over an extended period to make it manageable for consumers.
The recommendations from the long-awaited Independent Water Commission, established by the Labour government, were unveiled by Sir Jon. He proposed the abolition of the regulator Ofwat and its replacement with a unified and robust integrated water regulator. This move is aimed at enhancing efficiency and incentivizing water companies to operate more effectively.
The existing system has been heavily criticized for overseeing water companies that paid out dividends to shareholders while accumulating significant debts, leading to deteriorating infrastructure and increased sewage overflows. Water minister Emma Hardy echoed the sentiment that the water system is broken and consumers have been consistently let down. She endorsed the call for comprehensive reform to address the crisis, supporting Sir Jon Cunliffe’s recommendations. Emma Hardy expressed her disapproval of the 26% increase in water bills, attributing it to the deteriorating infrastructure.
In conclusion, the water industry is facing significant challenges that demand immediate action to ensure sustainability and affordability for consumers.