Britain’s privatised water and sewage companies secured some favourable headlines after it was announced they would oversee the biggest modernisation of English sewers “since the Victorian era”.
Against the backdrop of growing public anger over raw sewage being dumped into the sea and rivers when the system cannot cope with heavy rain, the industry said shareholders will make a £10 billion investment in sewerage infrastructure.
And then came the fine print.
Ruth Kelly, chair of the trade body Water UK, admitted the public will have to pay towards upgrading storm overflows – and could be doing so for up to a century.
To be clear, the upfront payment by the water companies will be recuperated from consumers by gradually raising their bills over time.
Kelly said: “Over time, the way the system works is that there will be modest upward pressure on customer bills over the full lifetime of the asset, so over 50 years or perhaps even longer, maybe up to 100 years, customers do contribute.”
So how much is “modest upward pressure”?
Anglian Water, which covers a long stretch of the east of England coast, became the first firm to a price on it. It suggested customers could face an increase on their bills of £91 a year – including £12 to help pay for investment in sewerage infrastructure.
Speaking on BBC Radio 4’s World At One programme, Anglian Water’s head of public relations, Regan Harris, said: “The initial investment will be put forward by our shareholders and the way we’re financed is that they put up that investment and Ofwat allows us to recover a proportion of that from bills.
“What we’re looking at is a fairly small increase of probably a few percent a year between now and 2030.”
It’s hard to gauge how much a household will pay, since it will be determined by individual regional water companies – and the longer the stretch of coastline to keep clean, the higher the bill is likely to be.
The regulator Ofwat said water companies will submit their National Overflows Plan by October 2 which will include any bill increases for the period 2025-30.
The regulator will analyse the plans, giving a final announcement in December 2024, so any bill increases related to the storm overflows plan will not be felt until 2025.
Households have already seen the largest increase to water bills in almost 20 years this year when they soared to £448 a year. Meanwhile, as the Financial Times reported, water and sewage companies paid £1.4 billion in dividends in 2022, an increase from £540 million the previous year.
“This is nothing to celebrate whatsoever.”
And the backlash has begun, with the Metro’s front page screaming ”£10 Billion Dirty Trick”.
Musician and clean river campaigner Feargal Sharkey criticised the water companies for making customers pay “a second time”.
He told BBC Radio 4’s Today Programme: “They are now suggesting that we should pay them a second time for a service we haven’t had.
“We should have an apology for the suggestion they are going to put bills up by £10 billion for their incompetence and their greed.
“This is nothing to celebrate whatsoever. What they should be saying is, ‘we messed this up, we’re terribly sorry, we’re going to compensate you all, £10 billion, it is the least we could do for our customers, give you a refund’.
“That we could all get behind. This is just another outbreak of moral panic due to the pressure and scrutiny they are coming under.”