Ofwat hints at delivery doubts as firms propose an average totex increase of 63% for PR24

Ofwat fired a shot across the bows of water companies last week in terms of their ability to deliver vastly expanded investment programmes in PR24, when it published headline data from its early appraisal of business plans.

The data included proposed totex increases between PR19 and PR24 of an average 63%, ranging from 19% for Affinity Water to 100% for United Utilities. And bill increases between 2024-25 and 2029-30 of an average 31% for water and sewerage companies and 15% for water only companies.

The regulator pointed out that its latest Water Company Performance Report showed that after three years of the 2020-25 period, 13 out of the 17 water and wastewater companies had not spent their forecast enhancement allowance. It called on water companies to use the next 12 months to prove to customers that they can deliver better service and improve the environment.

Senior director, price review, Chris Walters, said: "The water companies have set out their proposals for the coming price control period, which include record levels of investment. Companies should not wait for our decisions on these proposals. We expect them to be taking action now to deliver. And where they do not deliver, we will ensure that the appropriate regulatory mechanisms are in place to protect customer interests against delayed or late delivery.”