Water bills are expected to increase by as much as 30% in the next five years, according to a significant report aiming to reform the struggling industry. Sir Jon Cunliffe, the former Bank of England chief, highlighted a substantial surge in customers’ bills in the past year. Water UK has cautioned that the national average water bills for the upcoming year (2025-26) are estimated to climb by £123, equivalent to a 26% rise, or around £10 per month.
Sir Jon explained on BBC Breakfast that bills are projected to surge by over 30% in real terms over the next five years due to unavoidable factors such as rising costs in water production, wastewater management, climate change impacts, higher environmental standards, demographic pressures, and the necessity to update aging infrastructure.
He emphasized the need to support the most vulnerable and to spread the cost increases over an extended period to aid people in coping with higher water expenses. Sir Jon also stressed the importance of regulators in enhancing efficiency and encouraging water companies to operate more effectively.
These statements coincide with the release of more than 80 recommendations from the long-awaited Independent Water Commission established by the Labour government. Sir Jon proposed the replacement of the current regulator Ofwat, criticized by Environment Secretary Steve Reed, with a more unified and influential integrated water regulator, as outlined in the recommendations.
The prevailing system has received severe criticism for its oversight of water companies, which have distributed dividends to shareholders and amassed significant debts while essential infrastructure deteriorated and incidents of sewage spills increased rapidly.
Water minister Emma Hardy echoed concerns about the broken water system, emphasizing the need for comprehensive reform to address the crisis. She supported Sir Jon Cunliffe’s recommendations and criticized the 26% increase in water bills, attributing it to the deteriorating infrastructure.
In conclusion, the water industry is facing a period of significant change and challenges, with a pressing need for reforms to ensure sustainable and efficient water services for consumers.