The water regulator OFWAT has finalised its price review for 2020-25 by confirming a major investment programme to improve services for customers and the environment.
Ofwat has revealed a spending package of £51bn for the next five years. A quarter of this, around £13bn, will be investment dedicated to providing resilient services and a better environment in the face of a growing population and climate change.
Customers will also see a reduction in average bills of about £50 before inflation. The regulator has secured this by demanding greater efficiency, passing through lower financing costs and promoting more innovation.
Some water Companies are expected to object to the price cuts and have two months to appeal to the water authority.
OFWAT also expects the Companied to cut leakage by 16% and to identify and help an additional two million customers who need extra support.
It expects them to invest over £1 billion to protect communities at risk of flooding and to reduce pollution into rivers and streams by almost a third.
The Companies should also prepare for drier weather by providing £450 million to explore new water resources such as reservoirs or moving water from where there is lots to places with less.
Ofwat Chief Executive, Rachel Fletcher, said:
“Today we’re firing the starting gun on the transformation of the water industry backed by a major investment programme to deliver new, improved services for customers and the environment and resilience for generations to come. Now water companies need to crack on, turn this into a reality and transform their performance for everyone.
“They will be investing the equivalent of an extra £6 million each and every day to overhaul services, strengthen their infrastructure and improve our natural environment. And at the same time, customers’ bills will fall by an average of £50 before inflation.”