Andy Burnham has said he is angry with water companies for treating their customers as a “bottomless source of funding” after more than a dozen firms were given the green light to raise bills even higher. The prime minister said the companies must not be allowed to treat bill payers like a “blank cheque”, after Ofwat, the regulator, approved proposals for billions of pounds of spending on repairs and infrastructure. Five companies – Southern Water, Thames Water, Severn Trent, Wessex Water and South East Water – will be allowed to increase bills more than originally planned before the end of the decade to allow for the extra spending.
The remainder will add the costs to bills in the 2030s. The prime minister’s comments are an escalation of his warnings to utility companies that he is looking at options for more public control over water companies, which are under fire for paying millions in dividends while failing to deal adequately with pollution and leaks. His team have already been examining the possibility of taking Thames Water into public ownership, as it grapples with overwhelming debt.
Ofwat gave approval on Thursday for 13 companies to spend £3.4bn more than planned, including to support new homes and datacentres. It said the companies had asked to spend £4.3bn on top of what had been agreed in 2024 owing to unforeseen costs, and it had allowed £3.4bn. The new spending will come on top of the £104bn programme of investment approved by the regulator that had already meant water bills will rise by 36% over the second half of the decade.
The prime minister said he was “angry” that households “have been asked to pay more for years, yet serious pollution incidents are at record levels and the pipes are still leaking. He added: “Customers cannot be treated as a blank cheque. Where water companies seek to pass unnecessary costs on to households, they will be challenged.” Burnham also repeated a promise that the government would study “how we can give the public more control and help keep bills as low as possible”.
The Ofwat proposals immediately sparked further calls for nationalisation of the industry and for Burnham to reject Ofwat’s approval for the extra spending. Clive Lewis, a Labour MP on the left, who supported Burnham for the leadership, said: “I’ll bet you these projects will never see a large chunk of that money. We pay for the system through our bills.
Yet almost third of them go to returns for investors and creditors. And they keep asking for more. The only way to end this is public ownership.” Tim Farron, the LibDem environment spokesperson, said Ofwat was “merely a rubber stamp for failure”, and that hard-working families are “being forced to cough up another £3.4bn to fix a broken water network that greedy executives have neglected for decades”.
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