Water bills are projected to increase by as much as 30% in the next five years, as stated by the author of a significant report aiming to revamp the industry. Sir Jon Cunliffe, a former Bank of England chief, highlighted a substantial surge in customers’ bills in the past year. Water UK has cautioned that the average national water bills for the upcoming year (2025-26) are expected to climb by £123, equivalent to a 26% increase, or approximately £10 per month.
During an interview with BBC Breakfast, Sir Jon emphasized that bills are anticipated to rise by more than 30% in real terms over the following five years. He attributed this increase to factors such as climate change, stringent environmental standards, demographic growth, and the necessity to upgrade aging infrastructure. Sir Jon also pointed out the necessity to assist vulnerable individuals and gradually manage the higher water costs to alleviate the financial burden on consumers.
These statements coincide with the release of over 80 recommendations from the long-awaited Independent Water Commission established by the Labour government. Sir Jon has proposed the replacement of the current regulator Ofwat with a more unified and robust single integrated water regulator. This suggestion comes in response to criticisms from Environment Secretary Steve Reed, who described Ofwat as ineffective.
Water minister Emma Hardy echoed the sentiments of the Independent Water Commission, acknowledging the broken state of the water system and the repeated failures experienced by consumers. She emphasized the urgent need for comprehensive reform to address the crisis and commended Sir Jon Cunliffe’s recommendations. In light of the significant bill increases, Hardy expressed her concern over the deteriorating infrastructure contributing to the escalating costs.
The current regulatory framework has been under scrutiny for overseeing water companies while shareholder payouts and mounting debts were prioritized over infrastructure maintenance. The call for substantial reforms to address these systemic issues reflects a pressing need for a more efficient and transparent water management approach.