Since my last column, we have seen, amidst the fanfare of Ofwat (economic regulator for the water industry) publicity, the announcement of water bill increases, future investment, and allowed rates of return for water companies for the period 2025-2030.

So, how does this proclamation affect the average household bill in the South West? Well, averages are just that some could rise more, some less, but the predicted average household bill will increase in April from £497 to £551 – an increase of £54 (+11%) and for the period 2025-2030 as a whole, an increase of £113 (+23% compared to 2024/25). But, and there is a big but.

The new Labour Government decided to scrap the subsidy of £50 per bill originally introduced in 2013 to counter the effect of higher bills in the South West compared to the rest of the country. The powers that be now argue that this anomaly has evened itself out over time.

So the reality is that the actual payment by the ‘average’ householder will see an outgoing payment/increase of £104 from 1st April this year (£54+£50 subsidy cancellation). Can it be justified?

Well, the subsidy cancellation is a national decision, and there is an argument that the government has a point regarding closing the gap between SWW average bills and those of others. However, that gap will not be significantly narrowed until the end of the 2025-30 period rather than now.

Like all subsidies, including winter fuel support, they become a given in managing a tight household budget, and impact when they are no longer there, so I do hope that SWW gets its administration right and ensures that no customer suffers beyond an unwelcome and untimely inconvenience. There is support for those who do. So get in touch with SWW customer services if that is likely.

So is the actual billing increase justified?

There is no doubt that the water and sewerage infrastructure is no longer fit for purpose, not only in the south-west but across the country. Lack of almost a century of sufficient investment, compounded by local domestic and industrial development, and the increasing effect of climate change. It does need huge additional investment in water resources, treatment, and under-capacity sewers, leading to frequent overflows.

Is the current water company model the right vehicle to deliver the improvements we all want to see? NO. Why?

Under the current regime, Ofwat sets performance, charges + incentives = water companies struggle to achieve, often by reducing sharp-end operating costs = higher risk = supporting bigger pay-outs for owners, shareholders, and execs.

Initially, companies accepted a higher risk on wastewater and we have seen results; now there has also been a tendency for higher risk on drinking water as 2024’s incidents show.

In the last 12 months over 100,000 homes affecting over 300,000 people have experienced water supply interruptions in England, through ‘technical faults’ or contamination of supplies (not bursts) leading in one case to illness affecting hundreds of people.

This has rarely happened before. Three companies share this dubious record and we await the Drinking Water Inspectorate reports. Two of the three are owned by Pennon Group; South West Water and SES Water (Sutton and East Surrey).

This is why there is an urgent need for a comprehensive review of the water industry in England and the way it is set up and regulated. A Water Commission has been constituted recently and its work is currently underway.

Due to the report in June, let’s hope it's not a typical Government can-kicking exercise accompanied by little else.

More about this in later columns.