Water companies are lobbying for bill rises of up to 84 per cent in the next five years in a fresh blow to customers.
Firms including beleaguered Thames Water have applied to the regulator, Ofwat, to hike tariffs so they can upgrade their networks, often after years of underinvestment.
The increases will also pay for higher energy costs since pumping water around the country uses plenty of power, as does treating sewage. Energy costs make up around a tenth of water companies’ costs.
Southern Water wants bills to rise the most from today’s prices, by 84 per cent, with Thames Water asking for a 53 per cent rise. Northumbrian water has requested the least, at 21 per cent for the 2029-2030 financial year.
Since being privatised in 1989 by the then Conservative government, many water companies have been accused of underinvestment and paying large dividends to their new owners.
Thames Water has come in for particular scrutiny because of its parlous financial position. It has been teetering on the edge of collapse and is trying to raise money from its investors.
The company has £15bn of debt and it is in talks with 90 of its creditors who hold about two-thirds of those borrowings.
The companies have also been criticised for the amount of raw sewage that has been dumped into rivers and the sea.
The firms can release sewage when rainfall is high to prevent flooding, but these releases have grown in frequency and have led to more beaches being shut.
The Environment Agency has warned against swimming at 24 sites in the UK because of drops in water quality, warning of the risk of sickness for those who do.
Earlier this month Ofwat said water companies were being hit with £157.6m in penalties after they missed pollution and leak targets. Thames Water accounted for more than a third of the fines at £56.8m.
The firms’ poor performance has led to calls for the companies to be renationalised, but that would cost £99bn, an unlikely figure given Chancellor Rachel Reeves’ plan to shore up public finances.
Baroness Hayman, a Department for Environment, Food and Rural Affairs (Defra) minister, told the House of Lords last month: “Given the significant costs attached, the Government has no intention to nationalise water companies.”
Labour vowed to “put failing water companies under special measures to clean up our water” in its 2024 general election manifesto.
Ofwat will make a final decision on water companies’ plans to raise bills from 2025 to 2030 in December.
