Water bill discounts: the customers due to save money

Thames Water will be forced to return more than £50m to its customers and Southern Water almost £30m after both water providers missed key performance targets.

Yorkshire Water, which has to return £15m, and Anglian Water, which has to return £8.5m, are among the dozen companies in England and Wales facing penalties by the water services regulator, Ofwat.

The watchdog’s chief executive, David Black, said “too many water companies are failing to deliver for their customers” with the “poorest performers”, Thames Water and Southern Water, “consistently falling beneath our expectations and those of their customers”.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

The penalties come after the industry faced “the biggest wave of protests since privatisation more than 30 years ago due to untreated sewage pouring into rivers and coastal waterways near popular beaches”, reported the Financial Times (FT).

Why are the companies being fined?

According to Ofwat, the companies are being hit with penalties for “missed targets on areas such as water supply interruptions, pollution incidents and internal sewer flooding”.

Water companies are allowed to dump sewage in rivers, lakes and seas at times of exceptional rainfall, to help relieve pressure on the sewerage system. But some companies are under investigation by the Environment Agency for “significant and widespread breaches” of the legal permits.

Since the industry was privatised in 1989, water companies in England and Wales have paid out billions of pounds in dividends “despite enjoying a natural monopoly”, said The Guardian. Because customers cannot switch suppliers if their water company underperforms, “Ofwat instead runs the ‘outcome delivery incentives’ system of automatic payments or penalties according to pre-agreed targets”, the paper added.

Where will water bills go down?

Thames Water and Southern Water, which service London and the southeast of England, were the “poorest performers” and have been ordered to repay a combined total of almost £80m, Ofwat said.

The companies ordered to return money to customers are:

Affinity Water £800,00

Anglian Water £8.5m

Dŵr Cymru £8m

Hafren Dyfrdwy £400,000

Northumbrian Water £3.6m

SES Water £300,000

South East Water £2.9m

South West Water £13.3m

Southern Water £28.3m

Thames Water £51m

Wessex Water £2.6m

Yorkshire Water £15.2m

Mike Keil, policy director at the Consumer Council for Water, told the FT that the penalties would “help to ensure bills do not rise as much as anticipated next April for some customers, but it won’t be enough to cushion the blow for the one in ten households that already say their water bill is unaffordable”.

Will some water bills go up?

The “outcome delivery incentives” system works both ways, so “companies exceeding their targets will be allowed to raise prices, meaning bills could go up for millions of people”, said Glasgow-based paper The Herald.

Bristol Water £600,000

Portsmouth Water £400,000

Severn Trent Water £101.8m

South Staffs Water £3m

United Utilities £24.2m

To check which company provides your water and sewerage services, enter your postcode in the search tool at the Water UK website.

What other support is available?

Thousands of Britons may be eligible for 50% off their water bills to help with the cost-of-living crisis. Anglian Water has announced a support package for customers, with £135m to support customers struggling throughout 2023.

The package will help “an estimated 330,000 customers”, said the Daily Express, with “discounted tariffs on water bills, temporary payment plans, forgiveness schemes and payment breaks in certain circumstances”.

With many customers now struggling to cope as a result of the cost-of-living crisis, Ofwat has urged water suppliers “to pilot new ways to help vulnerable households, including seasonal charging to help lower water bills in the winter when energy costs are higher”, said the FT.