Household water bills in England and Wales are to rise by an average £19 a year over the next five years – a third less than the increase requested by companies, under draft proposals announced by Ofwat.

The regulator said water firms proposed increases averaging £144 over five years.

For example, Thames Water’s proposed increase of £191 by 2030 has been reduced to £99, while Severn Trent’s proposed rise of £144 has been cut to £93.

Ofwat chief executive David Black said: “Customers want to see radical change in the way water companies care for the environment. Our draft decisions on company plans approve a tripling of investment to make sustained improvement to customer service and the environment at a fair price for customers.

“These proposals aim to deliver a 44% reduction in spills from storm overflows compared to levels in 2021. We expect all companies to embrace innovation and go further and faster to reduce spills wherever possible.

“Today’s announcement also increases the resilience of our water supplies to the impact of climate change and will reduce how much water is taken from rivers by enabling a range of long-term water supply projects, which includes plans for nine reservoirs.

“Let me be very clear to water companies – we will be closely scrutinising the delivery of their plans and will hold them to account to deliver real improvements to the environment and for customers and on their investment programmes.”

Campaigners have warned Britons will feel anxious and upset by the proposed bill hikes amid a cost of living crisis.

There is also mounting anger over firms' dumping of raw sewage into the nation's waterways.

The data for 2023 shows a 54% increase in the number of sewage spills compared to 2022, and a 13% increase compared to 2020.

Mike Keil, chief executive of the Consumer Council for Water, said: “Millions of people will feel upset and anxious at the prospect of these water bill rises and question the fairness of them given some water companies’ track record of failure and poor service.

Customers understand investment is urgently needed but they need reassurance that every pound of their money is going to be well spent. Trust in water companies has never been lower and that won’t change until people see and experience a difference – whether that’s having the confidence to swim at their favourite beach or receiving help if they are struggling to pay their bill.”

“We estimate about 2 million households in England and Wales currently cannot afford their water bill and while the increase in financial assistance is welcome it falls short of what is needed. Over the summer we’ll be carrying out research with customers of every water company to gauge whether they feel the regulator’s proposals are affordable and deliver what people want. We expect Ofwat to listen and act on what customers tell us.”

The Liberal Democrats are calling for Ofwat to stop water companies from implementing large water bill hikes.

The party's environment spokesperson Tim Farron MP said: “Any insulting price hikes by water companies must be blocked.
“It is a national scandal that these disgraced firms are demanding more money from families and pensioners in a cost of living crisis, all whilst dumping raw sewage into our rivers.

“After years of Conservative Ministers letting these shameful polluters get away with it, we now need tough action, starting with a ban on bonuses and a block on large bill hikes.

“Communities spoke loudly at the election, demanding an end to the sewage scandal and water firms stuffing their pockets with bonuses and dividends. The government and regulator must listen to the country.”