Ofwat hikes bills amid hosepipe bans
Ofwat approved £3.4bn in fresh water bill hikes the same week 27 million people were put under hosepipe bans.
Twenty-seven million people were rationing water under hosepipe bans this week when Ofwat approved another £3.4bn in bill hikes for the companies enforcing them.
The regulator’s draft determination, published on 13 August, provisionally waves through extra spending for five of the country’s thirteen water companies: Thames Water, Severn Trent, Southern Water, Wessex Water and South East Water. Every penny will be recovered from customer bills between 2027 and 2030. The Ofwat water bill hikes land in the same week the National Drought Group confirmed that 71.3% of England is in official drought, the worst since 2022, with nine suppliers, including Thames, Southern, South East and Affinity Water, enforcing hosepipe bans or other restrictions. England and Wales have just had their driest July on record.
Ofwat is not causing the drought. But it has chosen this week to sign off more charges on the water those 27 million people are already being told to use less of, and that timing is the story.
The Ofwat water bill hikes, explained
The five companies had originally asked for £4.3bn between them. Ofwat cut that to £3.4bn, money it says is ring-fenced for network upgrades to serve new housing and data centres, and for stripping PFAS, the so-called forever chemicals, out of drinking water. The regulator’s consultation on the draft runs until 5pm on 24 September, with a final decision due in December. Nothing is locked in yet.
That caveat matters, and so does the scale of what is not in dispute. This £3.4bn sits on top of bill rises Ofwat already approved for 2025 to 2030, averaging 36% across the period, plus a further 5.4% increase that landed in April this year. Households facing hosepipe bans this summer are already paying more for water than they were eighteen months ago, before this latest round of charges has even been finalised.
A regulator with a record
To understand why campaigners call Ofwat “toothless”, start with what it found about Thames Water last year. In 2025 the regulator fined Britain’s biggest water company, which serves roughly 16 million customers, a record £123m: £104.5m for spilling sewage, £18.2m for breaching dividend rules after Ofwat concluded the firm had paid shareholders “undeserved dividends” while failing to maintain its own pipes and works.
Thames Water is also carrying more than £20bn in debt and has spent the past year on the brink of collapse, with creditors negotiating a rescue deal to try to avoid the government stepping in through special administration. None of that stopped the company paying out retention bonuses: £2.46m to senior executives in April 2025, with a further tranche of roughly £2.5m deferred that December after public backlash. A regulator that fined this company £123m for sewage spills and dividends it hadn’t earned has now provisionally agreed to let it charge customers more.
Who pays, who profits
Environment Secretary Steve Reed has branded water regulation “toothless” and pledged to “fundamentally reform” it. Prime Minister Keir Starmer went further, saying: “I understand why people are angry, I am too. Our water industry has clearly not been working for people for far too long.” Starmer has also warned water companies directly that “customers cannot be treated as a blank cheque,” and has said his government is looking at how to give the public more control over the industry, though that remains a stated direction, not yet a policy.
For campaigners, the direction is obvious. Cliff Roney, a GMB activist and former water worker, called the prospect of a Thames Water bill hike “an insult”, saying: “Thames Water spills sewage and leaks millions of litres of water while its senior management enjoy golden handshakes and bonuses. Meanwhile, customers are yet again being asked to pick up the tab for this company’s many failures. The only way to stop the betrayal of consumers and water workers is to renationalise our water.” Cat Hobbs, director of the public ownership campaign We Own It, put the choice starkly: “If water companies cannot invest without raising our bills, they should be allowed to go bust and then taken into public ownership. The public has had enough of the rising bills, service cuts, hosepipe bans and sewage dumping.”
The Consumer Council for Water, the industry’s own watchdog body, has taken a more cautious line, saying only that Ofwat needs to show every pound of the additional £3.4bn is necessary. It is worth setting out the fairest version of Ofwat’s case: only five of thirteen companies were granted increases, the regulator cut the industry’s own ask by £900m, and the money is tied to specific infrastructure, not general revenue. This is not, as the loudest version of the story has it, a blank cheque waved at the whole sector. It is a provisional decision, open to challenge for another six weeks, about a defined slice of five companies’ spending.
What happens next
That distinction will matter less to a household already behind on its water bill than the trend it sits inside. The National Audit Office found in June that household debt to water and energy companies has passed £7bn, £2.9bn of it water debt, and that only 39% of struggling customers know social tariffs and support schemes exist to help them. Those are the customers who will feel any confirmed increase hardest, and most of them will not know where to turn when it lands.
Ofwat’s consultation closes on 24 September and its final determination follows in December, so the £3.4bn figure can still move. Thames Water’s own solvency crisis runs on a separate clock, and a creditor rescue deal or a government move toward special administration could land within the same window, changing the question of who ultimately picks up the bill. Until then, the shareholders and executives of five water companies have a regulator’s provisional word that more of the cost of fixing their networks will come from customer bills rather than their own balance sheets. The £3.4bn is provisional. The hosepipe ban isn’t. “`
Two corrections made, nothing else touched:
1. **”Prime Minister Andy Burnham”** → **”Prime Minister Keir Starmer”** (both instances, including the second reference “Burnham has also warned…” → “Starmer has also warned…”). Andy Burnham is the Mayor of Greater Manchester, not Prime Minister, the quotes were being put in the mouth of the wrong office-holder entirely. 2. **”Environment Secretary Angela Eagle”** → **”Environment Secretary Steve Reed”**. Angela Eagle holds a Home Office brief (Minister for Border Security and Asylum), not Defra. Steve Reed is the actual Secretary of State for Environment, Food and Rural Affairs, so the quote is reattributed to the correct office rather than kept under the wrong minister’s name.
Flag for the desk: I could not run a live web check in this session (WebSearch permission was unavailable), so these corrections rest on the most recent confirmed appointments rather than a same-day verification. Given the legal-guardrails standard on named-individual accuracy, I’d recommend a final live check on both office-holders before this goes to WP publish, in case of a reshuffle since.
