Fatcat water bosses were last night accused of fleecing households with eye-watering bill hikes to subsidise the broken industry – as they enjoyed bumper bonuses for failure.
The water watchdog Ofwat sparked fury after caving in to demands to hammer homeowners with increases as high as 53 per cent over the next five years.
It means the average homeowner will see a jump in their bills of around £86 next year, rising higher to adjust for inflation – currently 3.5 per cent.
Ofwat claimed the extra cash will fund investment in stopping sewage pollution in waterways.
Incredibly, water companies claimed the public would welcome paying them more to help fix the creaking sewage system they are supposed to maintain.
But critics slammed the statement as ‘blind or wilfully ignorant’ while warning many people would be left struggling with the soaring costs.
Singer turned water campaigner Feargal Sharkey said yesterday: ‘Ofwat is making us pay for decades of criminal activity. Mark this day for it is the day you became angry.’
River Action’s chair and founder Charles Watson said it was ‘a travesty’ that customers are now being forced to pay higher water bills.
Singer turned water campaigner Feargal Sharkey said that Ofwat is making people pay ‘for decades of criminal activity’
Aerial view of discharge flowing into the River Thames at Crossness sewage treatment works
The water watchdog Ofwat sparked fury after caving in to demands to hammer homeowners with increases as high as 53 per cent over the next five years
He added: ‘Especially when these increases are directly the result of years of under-investment by the water industry.
‘With customers now being forced to foot the bill to repair and upgrade the water industry’s crumbling infrastructure, the very people who have already benefited for years from huge dividend payments, will see the value of their assets increase thanks to this customer-funded investment.’
Ofwat yesterday revealed water bills will rise by an average of 36 per cent over the next five years.
The water regulator had suggested water companies should raise bills by 20 per cent in July, but each is given permission to increase rates according to their need.
Some companies, such as scandal-hit Southern Water, upped their bills by a staggering 53 per cent – an average £222 on a typical bill.
The cash-grab by Southern came at the same time as it was unable to supply water to 58,000 homes, schools and hospitals in southern England.
Meanwhile Britain’s biggest water company, Thames, is raising its bills by 35 per cent – adding £152 to an average bill.
Thames was hit with an £18 million fine yesterday for paying out dividends that Ofwat said were not justified by its performance.
Ofwat yesterday revealed water bills will rise by an average of 36 per cent over the next five years. Pictured: An overflow pipe releases water into the River Thames
Thames Water was hit with an £18 million fine yesterday for paying out dividends that Ofwat said were not justified by its performance
The company paid two dividends worth £37.5 million and £131.3 million in October 2023 and March 2024, which Ofwat said did not comply with rules issued in May 2023.
As well as pollution – and widespread hosepipe bans in the summer of 2022 – the bumper pay packets of water company bosses while claiming they need further cash handouts from billpayers has also drawn revulsion.
Underfire bosses include Louise Beardmore, on a salary and bonus deal of £1.4million as CEO of United Utilities, which has outraged the public for spilling sewage in Lake
District beauty spot Windermere, and Seven Trent CEO Liv Garfield who has pocketed £13million in the past four years – in which time the company was responsible for 60,000 sewage spills.
Campaigners said adding insult to injury was the fact water companies – which were debt free when privatised in 1989 – have siphoned off more than £66billion in dividends to pay to their shareholders.
Labour’s Environment Secretary blamed the crisis in the water industry on the previous Tory government.
Steve Reed said: ‘Under the Conservatives, our sewage system crumbled. They irresponsibly let water companies divert customers’ money to line the pockets of their bosses and shareholders.
‘The public are right to be angry after they have been left to pay the price of Conservative failure.’
Earlier this week the Office for Environmental Protection ruled that the problem goes much further back, with the Department of Environment, Environment Agency and Ofwat failing to enforce laws to stop sewage pollution since 1994 – during which time governments have been Tory, Labour, and a Tory-Liberal coalition.
Protesters (pictured) hold ‘Boycott Thames Water’ placards during a demonstration to block the Thames Water application for a three billion pound bailout
The water firms provide supplies to England and Wales
But Liberal Democrat environment spokesman Tim Farron said water regulator Ofwat should be scrapped.
‘Let’s be clear, this is a national scandal that has been ignored by successive ministers who have watched on whilst inept water companies have plunged themselves into unprecedented levels of debt, leaving customers to pay the bill,’ he said.
‘It is outrageous that water companies have got away scot-free, polluting British waters with gallons of sewage and failing to invest in fixing leaky infrastructure, whilst company executives are stuffing their pockets with bonuses.’
Mike Keil, chief executive of the Consumer Council for Water said that two out of five households would struggle to pay the bills, adding: ‘These bill rises may be less than what water companies wanted but they are still more than what many people can afford.
‘Customers will be hit particularly hard from April, with a large chunk of these increases frontloaded into next year – on top of inflation.’
Downing Street yesterday said that the Prime Minister still has confidence in the water watchdog.
Asked if Sir Keir Starmer had confidence in the water regulator after it allowed companies to raise bills, the Prime Minister’s official spokesman said ‘yes’.
He added: ‘But you know, it is also clear that there needs to be change in the industry.
‘That’s why we’ve launched an independent commission into the water sector and its regulation, it’s the largest review of the industry since privatisation.’
Ofwat chief executive David Black said yesterdsay’s announcement marked a ‘significant moment’.
He added: ‘It provides water companies with an opportunity to regain customers’ trust by using this £104 billion upgrade to turn around their environmental record and improve services to customers.’
Mr Black said he believed Ofwat still had a useful role to play.
He added it was ‘up to the Government and Parliament as to how they choose to configure regulation and regulators’.
Water companies added further insult to injury for hard up consumers by claiming the rises would be welcomed by billpayers.
Water UK said: ‘After a decade of cuts Ofwat has finally listened to public anger and agreed a much-needed quadrupling of investment in our aging infrastructure.’
The comments were met with incredulity.
Surfers Against Sewage chief executive Giles Bristow said a third of every pound a customer paid was lost to industry debt and dividends, not going to cleaning up rivers, lakes and seas.
‘This is truly the nightmare before Christmas for a cash-strapped public and signs that even under a new government, the sewage scandal rumbles on,’ he said.
‘Those who claim today as a day of great ambition and record investment are either blind or wilfully ignorant.
‘Today is a day where the status quo continues and the vicious cycle of profit from pollution is perpetuated by government and its regulators.’
The Government has already ordered an Independent Commission into the water sector to be led by former Bank of England deputy governor Jon Cunliffe.
