Campaigners have been granted a full court hearing against the water watchdog amid allegations customers will be forced to pay twice for the industry’s failures. River Action, who conducted a judicial review against Ofwat, said households will be required to foot the bill for decades of infrastructure neglect instead of investors.
Emma Dearnaley, River Action’s head of legal, said: “We are delighted the High Court has said we can take our case to court. This is about the British public not paying twice for the consequences of water companies failing to invest in infrastructure. That is quite obviously fair and right, yet Ofwat’s approach gives rise to serious concerns that its promise has not been kept.
“It also raises important and timely questions about whether Ofwat is fit for purpose, something the Independent Water Commission is scrutinising too. We must have robust regulators who are up to the task of holding water companies to account.”
Average water bills in England and Wales will increase by 36% over the next five years, Ofwat said in December.
The rise is equivalent to an average extra cost of £31 a year.
River Action argued that the regulator’s decision to hike bills allows water companies to charge customers twice: first for water bills that should have covered infrastructure maintenance and then again through new hikes aimed at fixing the same problems.
Although their claim focuses on the 2024 price review (PR24) determination for United Utilities (UU) in relation to water works in and around Lake Windermere, the clean water activists think it exposes “fundamental failures” in Ofwat’s approach which has “national implications”.
UU confirmed a 32% increase in bills over the next five years.
An Ofwat spokesman said: “We reject River Action’s claims. The PR24 process methodically scrutinised business plans to ensure that customers were getting fair value and investment was justified.
“We agree that customers should not pay twice for companies to regain compliance with environmental permits, and have included appropriate safeguards in our PR24 determinations to ensure this which we will monitor closely, taking action if required. We will respond to their letter in due course.”
A United Utilities spokeswoman said: “We’re focused on delivering the largest investment in water and wastewater infrastructure for a century in Windermere and right across the North West, something that campaigners and customers alike have told us they want to see.
“This ambitious investment programme will protect and enhance over 500km of rivers, lakes and bathing waters whilst safeguarding drinking water supplies for millions of customers.”
