Campaigners have reacted with fury to a deal for water companies which they claim will continue “profit for pollution” of rivers and seas.
Regulator Ofwat has announced household bills in England and Wales will rise by an average £31 a year over the next five years, before inflation, as firms are given the go-ahead for £104 billion upgrade of the water sector which it said would deliver improvements for customers and environment.
But environmentalists warned the bill hikes would not solve the sewage crisis or guarantee cleaner water.
The investment package includes £12 billion on 2,884 projects to reduce sewage spills from storm overflows by 45% on 2021 levels, such as greater storage and green schemes.
There is also £6 billion of upgrades to combat nature-harming nutrient pollution from water works and farming, for around 1,000 sites and river catchments.
The package includes £3.3 billion for “nature-based solutions” such as sustainable urban drainage schemes and reed bed wetlands to filter water at treatment works, and for boosting wildlife on water company land.
To help water supplies become more resilient in the face of climate change, there is also £2 billion of development funding to unlock £50 billion investment for 30 major projects including nine new reservoirs and nine large-scale water transfer schemes, Ofwat said.
The announcement comes amid widespread public anger over the degraded state of rivers, lakes and coastal waters, which are beset with pollution from sewage, agricultural run-off and chemical pollutants, along with rising bills, and dividends and bonuses paid out by water firms.
“This is truly the nightmare before Christmas for a cash-strapped public and signs that even under a new government, the sewage scandal rumbles on,” he said.
He acknowledged the need for urgent investment but said: “Those who claim today as a day of great ambition and record investment are either blind or wilfully ignorant.
“Today is a day where the status quo continues and the vicious cycle of profit from pollution is perpetuated by government and its regulators,” he said, as he called for radical reform of the sector.
River Action’s chair and founder Charles Watson said: “It is a travesty that customers are now being forced to pay higher water bills, especially when these increases are directly the result of years of under-investment by the water industry.”
And he said: “With customers now being forced to foot the bill to repair and upgrade the water industry’s crumbling infrastructure, the very people who have already benefited for years from huge dividend payments, will see the value of their assets increase in thanks to this customer funded investment.”
“Dirty water companies shouldn’t be able to rely on their customers to foot ever higher bills while they line the pockets of their shareholders and leave our rivers brimming with sewage,” she said.
“These extortionate price rises won’t guarantee us cleaner water or solve the sewage crisis, they simply reward businesses for breaking the rules that protect people and nature,” she said calling for the right to a healthy environment in law, so communities could hold water firms to account.
Greenpeace’s director of policy Doug Parr described the bill hikes as a “bitter pill” for customers after years of poor performance and record levels of sewage in rivers and seas.
He said: “Water company shareholders and bosses have frittered away much of the money that might have been spent on our knackered water system.
“While we should stop any further funds going towards bonuses and dividends, this would count for small change compared with what needs to be spent.”
He said the Government would need to make up some of the shortfall to keep raw sewage out of bathing waters, and urged Ofwat to focus on protecting vulnerable customers and making sure the money is spent on improvements.
As the Ofwat determination was revealed, MPs on the Parliamentary Environment, Food and Rural Affairs (Efra) Committee announced an inquiry into reforming the water sector.
Committee chairman Alistair Carmichael said: “The experience of sewage discharged into our rivers and seas, supply outages and outbreaks of contamination in domestic water supplies have all fed a deep dissatisfaction with the current performance of water companies.
“Our inquiry will delve into the complex structuring of water companies’ finances, examine the challenges of upgrading the sector’s aged infrastructure, and investigate the real impact people are feeling from increases to their water bills.”
