The UK Environment Secretary has acknowledged that public fury over imminent water bill hikes is justified, citing years of underinvestment and weak regulation as the root causes.
Households across England and Wales face steep increases to address what he described as a “catastrophic failure” in water management.
Speaking to The Observer, Steve Reed warned of widespread anger as average water bills are expected to rise by at least 21% over the next five years.
He attributed the situation to a “failure of regulation and governance” and called for a “complete reset” of the water industry, which is grappling with decaying infrastructure, polluted waterways, and rampant leaks.
The water regulator Ofwat has justified the hikes, arguing they are essential for infrastructure improvements. However, water companies are pushing for even steeper rises, potentially up to 40%, which could see annual bills soar to £615 by 2030.
Amid concerns that the increases will further strain families already struggling financially, Reed vowed to reform the system to prevent future price surges.
“No one wants to see these bills rise,” he said. “The higher costs are a direct result of 14 years of Conservative mismanagement, failing to invest in water infrastructure while allowing bonuses and shareholder payouts.”
Reed highlighted the industry’s failings, including record levels of sewage pollution in rivers, lakes, and seas. Since 2020, water company executives have reportedly received £41 million in bonuses despite overseeing these shortcomings.
The government is introducing measures to overhaul the system, including new rules to ensure funds are reinvested into infrastructure and empowering Ofwat to ban excessive bonuses and hold executives criminally liable for pollution. A commission is also drafting what Reed called the “biggest reset in 35 years.”
While Reed expressed frustration over the current state of the industry, he emphasised that he cannot reverse the damage caused by years of neglect.
“The Conservatives’ refusal to invest has left us with crumbling pipes and polluted waters. Consumers are now being asked to foot the bill for these failures,” he said. “My priority is ensuring this never happens again.”
Reed clarified that he cannot interfere with Ofwat’s decision on the upcoming price hikes, as the regulator operates independently. However, calls for reforming or even abolishing Ofwat are intensifying, particularly after revelations last year that two-thirds of England’s largest water companies employ executives with previous ties to the watchdog.
The final announcement on water bill increases is expected on Thursday, with mounting pressure for the government to take decisive action against escalating costs and environmental mismanagement.
