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Households in England are set to face increased water bills as the Competition and Markets Authority (CMA) has permitted five water companies to raise charges. Anglian, Northumbrian, Southern, Wessex, and South East had requested higher bill hikes than what was initially approved by Ofwat, the regulator. The companies argued that the previously set rises of 36% over the next five years by Ofwat were insufficient for infrastructure improvements.
Following the CMA’s decision, the bills for the aforementioned water companies can now increase by an average of 3%, translating to about £12 per year for customers. An independent group of experts appointed by the CMA specified varying percentage increases for each company – Anglian and Northumbrian by 1%, Southern by 3%, South East by 4%, and Wessex by 5%. Despite the companies requesting larger bill hikes, the CMA only permitted an additional £556m out of the £2.7bn total revenue increase requested.
Kirstin Baker, who chaired the group of experts, stated that the water companies’ requests for substantial bill increases were mostly unwarranted. While the proposals are provisional, Ofwat and the water firms can provide responses before the final conclusion is reached. The CMA justified the rise in bills due to increased borrowing costs, as water companies heavily rely on borrowed funds for investment plans.
Water Minister Emma Hardy expects water companies to provide necessary support for individuals facing financial difficulties. Meanwhile, Anne Pardoe from Citizens Advice called for the implementation of a national social tariff to assist those in low-income households with essential bill payments. David Henderson, chief executive of Water UK, representing water firms, mentioned that the additional increases approved by the CMA could amount to an average of £1 per household per month for affected customers
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