The companies appealed to allow them to add another 2. 2% on to our bills - raking in an extra £463m but bill payers say they deserve 'prison sentences', 13 Apr 2026Five of Britain’s water companies blew £32m appealing to be allowed to ramp up customers’ bills even higher. Anglian, Northumbrian, South East, Southern and Wessex Water argued regulator Ofwat’s decision to let them put up prices by an average of 24% before inflation by 2030 was insufficient to cover costs and attract investors.
The appeal to the Competition and Markets Authority - aka CMA - cost Anglian and South East £9m each, Southern £7. 6m, Northumbrian £3. 7m and Wessex Water £3.
1m, according to newly released documents. The authority spent £5. 2m and Ofwat £3.
2m - taking the total spent on the appeals process to more than £40m. The revelation sparked fury from customers. One said: “Prison sentences for water company bosses please.
” Another said: “Please just nationalise them. ”One more wrote online: “A complete pigs’ breakfast. Ofwat are completely c**p.
”Someone else suggested: “Let them go bust, write off the debt, then re-nationalise for a token £1. Create a new agency (eg British Water) to deliver services at cost price. Also disband Ofwat as it’s been worse than useless.
”UK water companies are regional monopolies which rely on customer bills to cover costs. Every five years Ofwat sets out how much they can charge. That process costs the companies £250m for the five-year period even without an appeal, according to industry lobby group Water UK.
It argues the system has become overcomplicated and too expensive. In 2024 Ofwat ruled the five companies could impose an average 24% rise. The firms appealed and last month the CMA allowed them to raise bills by another 2.
2% - equating to £463m in extra revenue. The companies argued Ofwat’s initial price rise suggestion would mean they would struggle to get investment grade ratings from credit agencies needed to reduce borrowing costs and to avoid breaching the watchdog’s licence conditions. Several water companies are financially stressed after the 16 utilities raised £82bn in debt and paid out £85bn in dividends between privatisation in 1991 and March 2025, according to research by the FT.
According to a previous CMA report 20% of customers’ bills go towards servicing the debt and providing a return to shareholders. Thames Water, which is relying on a £3bn loan from creditors to stay afloat, also argued the permitted price increases were too low but has not yet appealed. Ofwat has struck an agreement that it can raise bills higher if it can find a supply chain to improve its infrastructure.
A downgrade of Thames Water’s debt by rating agencies in 2024 put the utility in breach of its operating licence. It is now receiving extra supervision under Ofwat’s special measures regime. A spokesman for Water UK, which represents the industry, said: “Ofwat’s final determinations have been overturned by the CMA is further evidence, if any were needed, that the regulatory system has failed.
”The findings come as the Government moves towards creating a new single regulator that brings together the functions of Ofwat, the Environment Agency, Drinking Water Inspectorate and Natural England. Article continues belowThe CMA wants appeal hearings transferred to an ‘appropriately resourced judicial body’. The Government is expected to release a paper outlining a transition plan for the new regulator after the May local elections.
Chris Walters, Ofwat’s interim chief executive, said: “We will reflect on the CMA’s decisions and their thorough examination of our final determinations and they will be part of our considerations for the next price review.