'Increase in water bills' to pay for £10bn investment, says industry chief

A £10bn investment from water companies to stop sewage spills will be paid for by customers through “modest increases to their bills”.

Ruth Kelly, chair of Water UK, told Sky News that water firms will provide a “huge multi-billion down-payment” to start “the biggest transformation project since Victorian times”.

She added: “The way the system works is that over the lifetime of the assets, customers do pay that money back in modest increases in their bills.”

Cost of living latest: EasyJet hikes tickets by 31%

Ms Kelly said that over the last 10 years, water bills have fallen for most people and “research shows us that customers are prepared to pay a little bit more to see this sort of investment undertaken”.

Speaking to BBC Breakfast, she said customers will be contributing to the works for 50 years “or perhaps even longer, maybe up to 100 years”.

It comes amid outrage over the multi-million pound bonuses and dividends paid to water company bosses despite huge levels of untreated sewage being pumped into the UK’s rivers.

Earlier, industry body Water UK pledged to invest £10 billion to clean up their act and said campaigners were “right to be upset” as it issued an apology.

But critics have questioned why firms aren’t paying to fix the problems themselves, with musician and clean river campaigner Feargal Sharkey saying the announcement is “nothing to celebrate whatsoever”.

Asked why customers are having to put their hands in their pockets when water companies paid £1.4 billion in dividends last year, Ms Kelly told Sky’s Ian King “dividends have been at very low levels compared to other sectors”.

She added: “As a sign of the seriousness with which the companies are taking this issue, all water company CEOs have come together and they said they’re not going to pay a single penny in bonuses out of customer funds this year.”

Sewage spills won’t be entirely eliminated

There were 301,091 sewage spills in 2022 in England, an average of 824 a day, according to Environment Agency figures.

A string of recent high-profile incidents, including a sewage discharge at a picturesque beach in Cornwall, have fuelled disgust over the issue.

Water UK said the £10bn comes in addition to a previous commitment to invest £3.1bn, and will be spent this decade.

This will pay for measures including enlarging and improving pipes and installing the equivalent of thousands of Olympic-sized swimming pools underground to hold surges in rainwater that would otherwise overload the system.

The package aims to cut sewage overflows by up to 140,000 each year, compared with 2020 levels.

However, Ms Kelly admitted sewage spills won’t be stopped completely because of the Victorian-era design of the system.

“You wouldn’t design a system like that today, but that is the system we’ve got. And it is going to take time to put that right,” she said.

“We won’t get to a situation where they [sewage spills] all disappear but we are going to make a dramatic impact on the harm by spills.”

Plans ‘don’t go far enough’

The leader of the Liberal Democrats, Ed Davey, said Water UK’s apology and plans “don’t go far enough”.

“For years water companies have arrogantly dismissed the public’s fears of rivers, lakes and coastlines being damaged by sewage discharges,” he said.

“This announcement does nothing to match the billions water firms have paid out in dividends to overseas investors, or stop their CEO’s being handed multi-million pound bonuses.”

Mr Davey, whose party made significant gains in the local elections after putting sewage dumping at the heart of their campaign, also called on Environment Secretary Therese Coffey to apologise.

He said: “This Conservative government has been pathetic on stopping sewage discharges into rivers, and every Conservative MP owes their constituents an apology for voting against tougher action. It says a lot when profiteering polluters have the decency to apologise, yet the government refuse.”