Former Bank of England chief Sir Jon Cunliffe has published a major report calling for the biggest overhaul of the broken water system since privatisation
(Image: GETTY)
Water bills are set to soar by up to 30% over the next five years, the author of a major report to shake-up the broken industry has said.
Former Bank of England chief, Sir Jon Cunliffe, said there had been a “huge rise” in customers’ bills over the past year. Water UK has already warned the national average water bills for the coming year (2025-26) are forecast to rise by £123 – or 26%. This is around £10-per-month.
Sir Jon told BBC Breakfast: “Bills are going to rise by over 30% in real-terms over the next five years. There are some inescapable facts here. The cost of producing water and dealing with our wastewater is going up.
“Climate change, higher environmental standards, demographic pressure, the population is going up. Just that need to renew ageing infrastructure. Those costs are going up.”
He added: “The problem comes when you suddenly go from not investing for a long period, to massive investment, in order to catch up. That’s really what’s driven those huge bill increases that we’ve seen.”
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“We need to help the most vulnerable, we also need to smooth that over a long period so that people can cope with the higher costs of water.
“And the regulators have a really important job in squeezing efficiency, incentivising the companies to be more efficient.”
His comments came as he published more than 80 recommendations from the long-awaited Independent Water Commission set up by the Labour government.
Sir John has called for the regulator Ofwat – described as failing by the Environment Secretary Steve Reed – to be scrapped and replaced.
Ofwat oversees how much water companies in England and Wales can charge for services. Instead, a “joined-up” and “powerful” single integrated water regulator should be established, according to the recommendations.
The current system has faced intense criticism for overseeing water companies during the years they paid out shareholders and accrued large debts while ageing infrastructure crumbled and sewage spills skyrocketed.
Water minister Emma Hardy has said the water system is “broken” and consumers have been “failed time and time again”. Speaking on Times Radio, she backed the findings of the Independent Water Commission, saying: “The water system doesn’t work.”
She said “root-and-branch reform” is needed to fix the crisis and praised Sir Jon Cunliffe for his recommendations. Asked about the prospect of higher water bills, she said: “I think it’s quite outrageous that bills have risen by 26%”, adding that the reason for the increase is because “the infrastructure is falling down”.
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