December 10, 2023

Water companies have set out a five-year plan to prevent 140,000 sewage discharges a year but customers will be asked to pay an extra £156 a year to fund the improvements.

The utilities will invest £96bn in the second part of the decade – almost double the current levels – in plans that companies say will pay for 10 new reservoirs, cut leaks and stop the equivalent of 6,800 Olympic swimming pools-worth of sewage spills.

The industry body Water UK said private firms had agreed to more than double the number of households that will receive financial support, rising by 2 million to 3.2 million, as the sector aims to address public anger over sewage being pumped into beaches and rivers during storms.

Consumers will be asked to pay higher bills to pay for the upgrades, with Water UK setting out that under the proposals the average bill in England is expected to be £7 a month higher by 2025 compared with 2023 prices. That will escalate to £13 a month extra by 2030, equivalent to £156 more a year.

The higher bills could lead to a backlash as households grapple with cost-of-living pressures and high inflation.

David Henderson, the chief executive of Water UK, said he recognised increased bills were “never welcome” but urged the regulator, Ofwat, to sign off on the proposals so the sector could counter sewage spills “as fast as possible”.

Ofwat has promised to “forensically scrutinise” the sector’s blueprint to ensure the rise in bills is “justified”.

The environment secretary, Thérèse Coffey, has said “major improvements” are required, having called for water firms to “step up and deliver lasting changes” with its 2025-30 submission.

Coffey said she had been “very clear” that “customers should not pay the price for poor performance”.

The watchdog, which has faced questions about its ability to regulate the sector, will make a final decision at the end of next year.

The industry said the planned investment, if approved, would cut leakage by more than a quarter by 2030, compared with the start of the decade, putting performance among the top five countries in Europe.

Spending £11bn on modernising Victorian-era sewers is forecast to reduce spills into waterways by more than 140,000 episodes a year by the end of the decade, Water UK said.

Nature-based schemes to manage rainwater will be created and technology brought in to better manage flows, as part of the upgrade works.

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Water UK said 30,000 new jobs and 4,000 apprenticeships will be created to help deliver the plan, representing a 50% increase in the workforce.

Henderson said: “These record-breaking investment proposals will secure our water supply as we deal with a changing climate and a growing population. While increasing bills is never welcome, this investment in our country’s infrastructure is essential to ensure the security of our water supply.”

The Ofwat chief executive, David Black, said: “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 has said it will put in place an incentive regime to reward companies that improve performance, while hitting firms with penalties if they fail to deliver.

Customers and stakeholders would be consulted on the plans over the coming months, the regulator said.

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