| Ofwat has provisionally approved an extra £3.4bn of water-company spending, much of it to be recovered through customer bills, as drought and infrastructure pressures intensify.
Water Bills Set to Rise as Firms Receive Extra Funding
The additional funding covers infrastructure and environmental pressures, including maintaining services, meeting demand from housebuilding and data centres, and tackling PFAS “forever chemicals”. Customers of five companies—Severn Trent, Southern, Thames, Wessex and South East Water—face additional rises over the next two years on top of increases agreed in 2024. Final approval is due in December.
The increases vary substantially. Southern Water customers could pay £43 more in 2027–28 and a further £37 in 2029–30. Thames Water customers could pay an additional £3 in 2027–28 and £5 in 2029–30. Other companies would recover approved spending after 2030.
Ofwat says it will track delivery and claw back expenditure if companies fail to provide the promised improvements. Critics argue that households are being asked to fund decades of inadequate investment while facing leaks, pollution and interruptions to supply. The decision comes as drought restrictions affect more than 27 million people.
Why it matters: The issue is not simply whether more investment is needed. It is whether customers should bear the cost before water companies demonstrate reliable delivery, reduced leakage, cleaner rivers and resilient supply. Regulation needs transparent performance measures, strong clawback powers and protection for households that cannot easily reduce essential water use. The engineering challenge is broader than new reservoirs: it includes leakage reduction, treatment capacity, water efficiency, reuse, sustainable abstraction and catchment restoration.