Millions face higher water bills after regulator lets firms increase charges

Jasper Jolly Helena Horton

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Water bills for millions of households in England are to increase by even more than expected after the competition regulator gave the green light for five suppliers to raise charges to customers but rejected most of their demands.

An independent group of experts appointed by the Competition and Markets Authority (CMA) decided provisionally to let the companies collectively charge customers an extra £556m over the next five years, it said yesterday. That figure represents 21% of the £2.7bn the companies had sought.

The five companies - Anglian, Northumbrian, Southern, Wessex and South East together serve 14.7 million customers. The changes will add 3% on average to bills on top of a 24% increase previously allowed.

The companies appealed to the CMA in February for permission to raise bills by more than had been allowed by the industry regulator, Ofwat. They had argued that they needed the additional money to meet environmental standards.

Water bills have become the subject of significant political controversy in recent years amid widespread disgust over leaks of sewage into Britain's rivers and seas.