A Welsh MP has said it is an “absolute outrage” that household water bills in Wales will increase to become the highest in England and Wales. The nation’s largest water company, Welsh Water Dwr Cymru, will be allowed to increase its bills from an average of £455 this year to £645 in five years time.
That is a huge 42% increase that is equivalent to a rise of £31 every year. However the rise is front loaded meaning that households will face a heavy average hike of £86 or 20% in the next year, excluding inflation, with smaller percentage increases in each of the next four years. The average bill will rise by a total of £157 or 36% over the next five years. For the latest Welsh news delivered to your inbox sign up to our newsletter.
Customers of Wales’ other major water company Hafren Dyfrdwy have significantly lower bills which currently average £392 and will also rise by 42% over the next five years to ready £557 in 2029/30.
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Welsh Liberal Democrat MP David Chadwick described it as the “final nail in the coffin” for Ofwat and went on to describe the regulator as a “toothless, defunct financial regulator that has watched on idly whilst Dŵr Cymru/Welsh Water and Hafren Dyfrdwy have pumped gallons of disgusting sewage into Welsh waters”.
The rises will make Welsh Water the most expensive water company in England and Wales while Hafren Dyfrydwy is the lowest.
The increase is significantly higher than the expected average rise of around £20 a year per household, outlined in the regulator’s draft proposals in July. Ofwat said the increase would pay for a £104 billion upgrade of the water sector to deliver “substantial, lasting, improvements for customers and the environment”.
Mr Chadwick, who represents Brecon, Radnor and Cwm Tawe, went on to say: “It is an absolute outrage that customers have had to foot the bill in the middle of a cost-of-living crisis for the mess that water companies have created under the previous Conservative Government’s watch.
“Welsh customers already have some of the highest water bills and have seen some of the steepest increases in recent years all while Welsh Water has one of the poorest environmental records, it is quite frankly a joke.
“Increases in bills will be money down the plughole unless water companies are held to account. The Welsh Liberal Democrats have led the campaign against sewage, calling for a new financial regulator for the sector, a better-resourced Natural Resources Wales and an end to executive bonuses.”
Some firms have been allowed significantly higher increases. Southern Water customers will face a 53% increase and Severn Trent households will see their bills rise by 47%, before inflation. DWr Cymru and Hafren Dyfrdwy have both been allowed to charge 42% more, while Yorkshire Water bills will rise by 41%.
Ofwat chief executive David Black said: “Today marks a significant moment. It provides water companies with an opportunity to regain customers’ trust by using this £104 billion upgrade to turn around their environmental record and improve services to customers.
“Water companies now need to rise to this challenge, customers will rightly expect them to show they can deliver significant improvement over time to justify the increase in bills. Alongside the step up in investment, we need to see a transformation in companies’ culture and performance. We will monitor and hold companies to account on their investment programmes and improvements.
“We recognise it is a difficult time for many, and we are acutely aware of the impact that bill increases will have for some customers. That is why it is vital that companies are stepping up their support for customers who struggle to pay.
“We have robustly examined all funding requests to make sure they provide value for money and deliver real improvements, while ensuring the sector can attract the levels of investment it needs to meet environmental requirements.
“This has seen us remove £8bn of unjustified costs compared with companies most recent requests. In addition, our approach to setting a rate of return has saved customers £2.8 billion.”
Ofwat said it had cut Southern Water’s requested increase by £126 (16%), Thames Water’s by £79 (12%), Hafren Dyfrdwy’s by £73 (12%) and Wessex Water’s by £44 (7%).
Environment Secretary Steve Reed said: “Under the Conservatives, our sewage 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.”
The Consumer Council for Water (CCW) warned the increases were “more than what many people can afford”.
CCW chief executive Mike Keil said: “These bill rises may be less than what water companies wanted but they are still more than what many people can afford.
“Customers will be hit particularly hard from April with a large chunk of these increases frontloaded into next year – on top of inflation.
“We know at least two in five households will find these increases difficult to afford but the support being offered by some water companies lacks ambition.
“People want to see more investment, but this must be coupled with a strong safety net for customers who will struggle to pay.
“The case for a single social tariff to end the current postcode lottery of support has never been more compelling.”
Tom MacInnes, director of policy at Citizens Advice, said: “These price rises will hit many households hard. While it’s encouraging to see help for customers increasing, the current dysfunctional approach to bill support in this industry means that people will continue to miss out.
“We found that more than two fifths (42%) of those likely to be eligible aren’t aware that water social tariffs exist. The Government and suppliers must work together to ensure that no one is missing out on the support they’re entitled to.”
Dŵr Cymru/Welsh Water and Hafren Dyfrdwy have been approached for comment.