Troubled Thames Water is among five water companies that have received provisional approval from the industry regulator to raise household bills further for millions of households under plans allowing suppliers an additional £3.4bn in spending.
In its draft determination, Ofwat stated that five out of 13 providers across England and Wales will be permitted to increase tariffs.
The extra funding, to be deployed by 2030, is intended to modernise infrastructure to cope with new housing developments and data centres, as well as target forever chemicals to safeguard drinking water supplies.
Financially burdened Thames Water is among the firms provisionally cleared to raise prices between 2027 and 2030, alongside Severn Trent Water, Southern Water, Wessex Water and South East Water.
It will likely stoke further anger, with the water sector repeatedly under fire over rising bills at a time of poor performance for sewage spills, water quality and supply failures.
Ofwat has already allowed water firms to put up bills by 36 per cent between 2025 and 2030, with eye-watering increases seen in 2025 and another 5.4 per cent on average from April this year.
Prime minister Andy Burnham took aim at Ofwat’s draft decision and said customers “cannot be treated as a blank cheque”.
He said: “I understand why people are angry – I am too.
“The truth is customers have been asked to pay more for years, yet serious pollution incidents are at record levels and the pipes are still leaking.
“None of which is the billpayer’s fault, who should not be treated as a bottomless source of funding for other people’s failures.”
He added: “Customers cannot be treated as a blank cheque. Where water companies seek to pass unnecessary costs onto households, they will be challenged.
“Our water industry has clearly not been working for people for far too long. That’s why this Government will be looking at how we can give the public more control and help keep bills as low as possible.”
It sees additional bill increases allowed for Thames Water – Britain’s biggest water supplier with around 16 million customers – which is on the brink of collapse as it sinks under a more than £20 billion debt mountain with creditors looking to secure a rescue deal to stave off temporary nationalisation by the Government.
South East Water, which is also set to increase bills for the investment programme, is another in the line of fire after a series of supply interruptions that has left thousands of households, businesses and schools without water.
Helen Campbell, executive director for delivery at Ofwat, said: “The newly agreed funding will help unlock much-needed new housing development and boost business growth across a range of sectors, as well as improving drinking water quality and the removal of PFAS and forever chemicals.
“We will track performance to ensure companies are delivering the expected improvements for customers and the environment. If they don’t, expenditure can be clawed back.”
Environment Secretary Angela Eagle said: “I know that households across the country are watching every pound and I share their frustration that years of underinvestment and toothless regulation has led to this.
“We have already ringfenced money earmarked for new infrastructure so it can only be spent on fixing the problems, and will go further by fundamentally reforming the water sector so that it works for the public; keeping bills as low as they can be, and delivering higher standards, better performance and cleaner waterways.”
The news comes as Thames Water faces fresh scrutiny after revelations that it paid £1m to a chief financial officer appointed a year ago.
The beleaguered firm is struggling under almost £20bn in debt, with cash running out to see the firm through beyond the end of this year and widespread concern about which direction is best for the future of the business.
The company hired Steve Buck in April of 2025 as CFO, who previously worked at water utility companies Pennon Group and Anglian Water. The £1m fee paid to Mr Buck was a delayed signing-on fee, as first reported by Sky News.
Among the other 14 executives to have seen retention payments agreed, two are with workers no longer at the firm and others are for smaller amounts than originally agreed or on more favourable terms.
The Independent understands the water firm took legal council prior to payments being agreed and made, in line with fulfilling its current financial obligations, while the Environment, Food and Rural Affairs Committee (Efra) were informed last week about the payment to Mr Buck.
Mr Buck’s joining fee was agreed to be deferred when he joined, but his contractual rights ultimately dictated he was to be paid the full sum.
Thames Water also paid chief executive Chris Weston over £1m last year, as shown in their own financial records released last month.
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