An independent group appointed by the Competition and Markets Authority (CMA) has released its provisional redeterminations on price controls for five water companies that challenged Ofwat’s final determinations. The review covers Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water, and outlines adjustments to funding, pricing, and investment expectations.
Key Outcomes:
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The group rejected nearly 80% of the increases sought by the companies.
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Customers can expect an average additional bill increase of around 3%.
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Extra funding is designed to support resilience, pollution reduction, and increased financing costs.
Summary of the Decision:
The group provisionally decided to allow 21% of the total £2.7 billion requested by the five firms — equivalent to an additional £556 million in revenue. This means an average 3% increase in customer bills, on top of the 24% increase already expected under Ofwat’s original determination.
The extra funding will help companies meet new legal requirements and invest in critical areas, such as ensuring supply resilience and reducing pollution. The group also acknowledged the need for slightly higher investor returns, reflecting rising interest rates and the higher cost of securing capital.
Focus on Efficiency and Accountability:
While some exceptions were made for underfunded investment needs, the group largely rejected new funding requests for projects beyond what Ofwat had already allowed. It also made adjustments to Ofwat’s economic modelling to ensure allowances better reflect the differences between companies’ operating environments, while applying a stretching efficiency challenge — ensuring customers of less efficient companies are not unfairly burdened.
Why It Matters:
These provisional decisions represent a balanced approach — recognising the financial pressures facing the sector while protecting consumers from unnecessary cost increases. The outcomes emphasise efficiency, targeted investment, and long-term resilience as key drivers for a sustainable water future.
You can read the full government release here:
🔗 Provisional redeterminations on water price controls issued (GOV.UK)