Water customers face further bill increases after Ofwat gave five suppliers permission to raise charges to fund an additional £3.4billion of spending.
Prime Minister Andy Burnham criticised water companies following the regulator’s provisional approval, saying households should not be expected to cover unnecessary costs.
He said customers had “been asked to pay more for years” while pollution incidents remained high and leakage problems persisted, adding that “customers cannot be treated as a blank cheque”.
Labour said it would explore ways to give the public greater control over the water sector and keep bills down.
Mr Burnham said: “I understand why people are angry – I am too.
“The truth is customers have been asked to pay more for years, yet serious pollution incidents are at record levels and the pipes are still leaking.
“None of which is the billpayer’s fault, who should not be treated as a bottomless source of funding for other people’s failures.”
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.
“Our water industry has clearly not been working for people for far too long. That’s why this Government will be looking at how we can give the public more control and help keep bills as low as possible.”
Ofwat has given Severn Trent, Southern Water, Thames Water, Wessex Water and South East Water permission to increase charges beyond levels already agreed under the existing pricing framework.
Southern Water, Thames Water and South East Water currently have partial or full hosepipe bans in place. The five companies collectively serve around 20 million customers.
Southern Water customers face the largest increase, with an additional £43 added to annual bills in 2027, falling to £37 by 2029.
Thames Water and Severn Trent customers will pay an extra £3 in 2027 and a further £2 in 2029.
Water bills set to rise as Ofwat approves £3.4billion extra spending
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Wessex Water plans increases of £4 in 2027 and £3 in 2029. South East Water customers will see an additional £1 added in 2029.
These rises come on top of a 36 per cent increase in water bills already approved for 2025–30, as well as significant bill increases in 2025 and a further average rise of 5.4 per cent from April this year.
Thames Water, Britain’s largest supplier, serves around 16 million customers and is facing debts of more than £20billion.
Creditors are working on a rescue package as the company faces the prospect of temporary public ownership.
South East Water has also faced criticism after repeated supply interruptions left thousands of homes, businesses and schools without running water.
Andy Burnham has previously hinted at nationalising Thames Water
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The Consumer Council for Water urged Ofwat to demonstrate that the additional spending is necessary and provides value for customers.
Senior policy lead Steve Hobbs said trust in water companies “has never been lower” and that improvements must be visible to households.
Shadow environment secretary Victoria Atkins called on the Prime Minister to set out further measures to address problems in the sector, warning that public ownership could carry significant costs for taxpayers.
Environment Secretary Angela Eagle said the sector had suffered from years of inadequate regulation and underinvestment and promised fundamental reform.
Alistair Carmichael, chair of the Commons environment committee, questioned whether previous promises of improved services had delivered sufficient results, saying improvements had been “hard to see”.
Ofwat’s draft determination followed a three‑month review of requests from 13 water companies.
Suppliers had originally sought £4.3billion in additional spending, with Ofwat reducing the amount approved by £752million.
Some rejected spending related to work companies had already received funding to complete.
Among the approved projects is Thames Water’s proposed £6.6billion reservoir in Oxfordshire, intended to strengthen water supplies for up to 15 million people.
The company also plans a wastewater‑treatment scheme to improve resilience during future droughts. Southern Water’s proposals include a water‑recycling facility on the Isle of Wight and flood‑prevention measures in Hastings.
Water UK said the current drought demonstrated the need for additional investment, arguing the spending would safeguard services, support new housing and business growth, and replace ageing infrastructure.
Ofwat’s Helen Campbell said the regulator would monitor whether companies deliver the improvements associated with the additional spending and warned that funding could be “clawed back” if commitments are not met.
Ofwat’s consultation on the proposed changes is open until September 24, with a final decision expected in December.