Millions of households in England will face higher water bills than initially anticipated, following a final decision by the Competition and Markets Authority (CMA) regarding industry spending plans. The regulator has permitted four water companies – Anglian, Southern, Wessex, and South East – to increase annual bills by an extra 2.65% on average, although Northumbrian Water will see no change.
The decision follows appeals lodged by five water companies against limits set by Ofwat, the industry watchdog, in December 2024. Ofwat’s initial price control for the period 2025 to 2030 proposed average annual household bill increases of £157 (36%) over five years. The appealing companies argued they required greater investment to upgrade aging infrastructure, including pipes, sewers, and reservoirs.
The CMA ultimately authorized an additional £463 million in revenue for the five companies – a reduction from the £2.7 billion initially sought. This translates to an average 2.2% increase in bills for customers of Anglian, Southern, Wessex, and South East Water, on top of the 24% average increase already approved by Ofwat for those firms. Northumbrian Water customers will not see an additional increase.
The five companies collectively serve approximately 14 million people and have a combined annual revenue of around £5 billion. Anglian Water will see the smallest increase at 1.7%, followed by Wessex Water at 3.3%, Southern Water at 2.5%, and South East Water at 3.7%.
The CMA’s independent group of experts, appointed by the CMA, stated it had “rejected most of the bill increases water companies asked for but allowed limited extra funding where that’s genuinely needed, balancing concerns about affordability with the need to secure our water supplies and cut pollution.” A significant portion of the additional funding reflects market movements since Ofwat’s original decision, according to Kirstin Baker, chair of the group.
The decision arrives at a politically sensitive time for the water industry, which has faced intense scrutiny over sewage spills and environmental performance. Last October, the industry’s reputation hit a low point amid record levels of sewage discharges, and the issue has been further highlighted by the recent Channel 4 drama, Dirty Business, which detailed historical contamination of British waterways.
Mike Keil, chief executive of the Consumer Council for Water, expressed concern over the increases, stating they “may be less than what these five water companies wanted but they are still more than what many customers can afford or will consider fair.” He noted a near tripling in complaints regarding the affordability of water bills in the past year.
Separately, Pennon, the owner of South West Water, anticipates further penalties from the regulator following power outages during recent storms that disrupted leak repairs. The company cited “exceptional and sustained rainfall” as creating operational pressures, leading to missed targets in water and wastewater operations.
Thames Water, Britain’s largest water provider serving 16 million customers, initially appealed Ofwat’s decision but later withdrew its appeal amid ongoing crisis talks focused on reducing its debt and ensuring its financial stability.
