The great spending spree

Water firms have the cash - but can upgrades be done on time?

- Jasper Jolly

When a sluice gate failed 24 metres below the water's surface at Thames Water's Queen Mother reservoir near Heathrow, there were no easy fixes available.

Emptying 37m cubic metres of water was not an option, meaning that helmeted divers were limited to 98-minute stints in the high-pressure environment.

The risky project required a team on a floating platform with a crane to cut out the broken equipment with thermal lances, bolt a plate on to the reservoir wall, and install the new equipment. It took more than a year until last October to complete, according to Glenfield Invicta, the contractor that carried out the work for Thames Water.

Water companies across Britain are this year gearing up for more of these repairs and upgrades than ever, as the industry undertakes the biggest spending spree in its history. It follows decades of underinvestment by private companies in England and Wales.

Yesterday, Labour announced plans to overhaul regulation of that system to try to make sure companies invest enough to avoid sewage overflows or leaking pipes. It will replace Ofwat, the regulator in England and Wales, and shift to a new regime regulating each company individually, rather than setting industry-wide targets.

Yet that will take time. In the meantime, water companies must continue with upgrades. In December 2024 Ofwat granted suppliers permission to increase bills by an average of 36% between 2025 and 2030 to fund £104bn in spending on pipes and water treatment works, compared with £51bn in the past five years.

That steep bill increase came at a political cost, amid outrage around the country over sewage spills into rivers and seas. Yet now they have won the money, some experts believe the water companies may struggle to spend it.