Environment Secretary Dame Angela Eagle has written to Ofwat and water company chief executives setting out the Government's priorities for the next price review, with affordable bills and value for money for customers at the top of the list.
The intervention concerns PR29, the five-yearly review expected to conclude in 2029, which will set what companies in England and Wales can charge customers from 2030. It is the first time ministers have become directly involved in the process, which is run by the regulator.
Angela Eagle: 'Drawing a line under years of failure'
"The water sector is a symbol of everything that went wrong under the old status quo, and today I'm drawing a line under years of failure," Angela Eagle said. "This is not business as usual. I have given the regulators and the water sector clear direction, and I expect them to act on it now, as part of a 10-year journey to a different and more radical system."
Value for money, leaks and local voices
The letter says the first priority must be affordable bills, adding: "Affordability means a laser focus on value for money for customers." It calls for investment in new technology to save money, earlier action on leaks and sewage overflows, and far more say for local communities and leaders in decisions.
It sets out what the public want from the industry: "They want clean rivers. They want reliable water services. They want to know that their money is being spent wisely, and that bills are kept affordable."
The letter stops short of demanding bill cuts, but warns that this will "not be a business-as-usual price review" and describes it as "the beginning of a long-term transition to a different model for the water sector".
The last price review in 2024 approved a £104 billion investment programme for 2025 to 2030 and allowed average household bills to rise by £157, or 36 per cent, over five years.
The intervention is expected to be the first in a series of changes to the water industry in the coming months, with Prime Minister Andy Burnham's 10-year plan set to give the Government stronger powers to keep bills affordable.
