The government is preparing to intervene in the next review of water company charges, with ministers demanding more affordable bills and better value for customers. But there has been no promise that household water bills will actually fall.
Environment Secretary Dame Angela Eagle has written to water companies and regulators setting out government priorities for the 2029 price review, which will determine how much companies in England and Wales can charge during the five years from 2030.
The move follows years of public anger over sewage pollution, leaks, the condition of water infrastructure and rising bills. It also comes during a period of serious drought affecting parts of England.
What is the government changing?
According to reporting by The Guardian, the environment secretary wants the next price review to place greater emphasis on affordability, cost-saving technology, early action to prevent leaks and sewage spills, and the role of local communities in investment decisions.
In comments reported by Sky News, Dame Angela said the water sector had become a symbol of past failures and declared that it was no longer ‘business as usual’. The regulators said they were considering her letter and would respond with their initial thoughts on the 2029 review.
This is an intervention in the priorities and direction of a future regulatory process. It is not an announcement of an immediate reduction in household charges, nor is it a cancellation of previously approved rises.
How much are water bills already rising?
Ofwat’s December 2024 settlement approved a £104 billion investment programme for water companies in England and Wales between 2025 and 2030. It allowed the average combined household water and wastewater bill to rise by £157, or 36%, over the five-year period before inflation.
That was a sector-wide average, not a single uniform increase for every home. Ofwat’s original determinations showed considerable differences between companies, including a projected 53% increase for Southern Water and 21% for Wessex Water. Subsequent regulatory and competition decisions can affect individual company allowances.
In January 2026, water industry body Water UK announced that the average household bill would increase by a further £33, or 5.4%, from April 2026. Those increases are being used to finance infrastructure work, improved supply resilience and action on pollution.
Are water companies being made to pay for poor performance?
Separately, Ofwat announced on 14 October that it was consulting on net reductions totalling £240 million in customer bills after assessing companies’ performance against service targets for 2025–26.
Of that proposed adjustment, £107 million would be reflected in bills in 2027–28. The figures are still provisional, and the eventual effect will vary by company and customer. This is not a £240 million cash payment to individual households and does not mean all bills will be lower than they are today.
At the same time, Ofwat has provisionally allowed around £3.4 billion of further investment under its cost-change process. Crucially, Ofwat says only five of the 13 applicant companies could recover some of this funding through customer bills before 2030; some costs would be deferred to the following regulatory period. The proposals were subject to a final decision due in December 2026.
Put together, these decisions demonstrate why a headline about government action should not be confused with a guarantee that customers will pay less.
Does this mean water companies will be nationalised?
No. The proposed price-review intervention is separate from changes to ownership rules.
On 29 September, the government announced plans to remove historic limits on the shares it may own in major water and sewerage companies in England. Ministers say this would provide more options to intervene in failing companies, while retaining a role for private investment.
Removing a statutory restriction on state shareholding would not automatically transfer water companies into public ownership. The proposed changes would also apply in England, rather than imposing an identical ownership model across the UK.
What happens next for customers?
The existing 2025–2030 price controls remain the starting point for household bills. Ofwat’s next major review is expected to conclude in 2029 and will govern charges from April 2030 to March 2035. The government is also preparing wider water-sector reforms.
Whether ministers’ intervention results in lower bills, slower increases or simply different spending priorities is not yet clear. The test will be in the detailed rules, the regulator’s decisions and whether companies deliver the improvements customers are paying for.
The bottom line: Ministers want more influence over the next round of water bills and investment. They have not announced an immediate price cut, and the substantial increases already agreed for this decade have not been withdrawn.
