Water Bills: Price Review 2024 Final Determinations

Steve Reed Excerpts

Thursday 19th December 2024 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)]

Our water system needs fixing. Our rivers, lakes and seas are choked by pollution.

Under the Conservatives, our sewerage 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.

This Labour Government will ringfence money earmarked for investment so it can never be diverted for bonuses and shareholder payouts. We will clean up our rivers, lakes and seas for good.

Ofwat, the independent economic regulator, has today published its final determinations for price review 2024. This independent process sets the prices water companies can charge customers in the form of water bills over five years. This includes a confirmed £104 billion of water company expenditure over the next five years—2025 to 2030. This is the highest level of investment in the water sector since privatisation. This investment will be crucial to deliver the improvements in the sector that the public expect to see.

In the next five years, the increase in bills is expected to pay for:

£12 billion investment to reduce harm from storm overflows which will reduce storm overflow pollution by 27%, including upgrading more than 2,800 storm overflows.

An £8 billion investment to boost water supply, including progressing nine new reservoirs.

Leakage reduction of 17%—taking it to the lowest since privatisation.

30,000 new jobs across the country.

While this much-needed investment in the sector is welcomed, no one wants to see these bill rises, but customers have been left to pay the price of Conservative failure.

This Labour Government will ensure that this can never happen again by ringfencing money earmarked for investment, so it is spent on cutting sewage spills and improving services for customers—not on bonuses and shareholder payouts. If the money is not spent how it was intended, it will be refunded to customers.

We expect water companies to put robust support in place for customers that are struggling to pay their bills, and ensure customers know how to access it. This includes:

Bill discount schemes such as WaterSure and social tariffs.

Actively offering payment breaks or payment holidays.

Adjusting payment plans urgently to help with sudden changes in household finances.

Simplifying the processes for customers to get extra assistance.

Helping customers get advice on benefits and managing debts.

Going forward, we have a plan to fundamentally reset the water sector—so we are not just fixing past failure, but also unlocking opportunities for the future.

We are putting accountability back at the heart of our water system. The Water (Special Measures) Bill will put a stop to the behaviour that has so enraged the public. It will strengthen regulations, including new powers to ban the payment of bonuses for water bosses if environmental standards are not met and bring criminal charges against lawbreakers, with new, tougher penalties including imprisonment when companies obstruct investigations.

We have launched an independent commission into the water sector and its regulation to put customers first, transform how our water system works and clean up rivers, lakes and seas for good. This is expected to form the largest review of the industry since privatisation.

This is a once in a generation chance to reset our water sector and deliver the change we all want to see. After years of pollution and decline, it is time to invest in new opportunities and restore our clean rivers, lakes and seas.

[HCWS345]