Southern Water unveils plan for site area based charging

Businesses with large premises and car parks could see charges for surface water drainage increase markedly under plans under consideration by Southern Water.

The company is considering phasing in site area based charges for surface water drainage over a number of years, starting in 2026-7. Southern explained the shift would be revenue neutral but would replace the existing arbitrary basis for charging which is linked to water supply pipe size and offer the following advantages:

• Make charges cost reflective and more fair, improving the affordability of bills for household and small business customers by shifting the burden of cost onto premises that contribute greater volumes of water into the drainage network. 

• Encourage the installation of sustainable drainage systems, by offering discounts to those who reduce or attenuate flow into the network or disconnect entirely from combined sewer systems.

Southern’s notification document was very high level; the company plans to consult formally later in the summer on a likely charging structure and bill impacts. However, it said all households and most small-to-medium-size business premises would go into the lowest charging band, and that concessions would be applied to community groups and places of worship, as per Defra policy.

The impact of the change will be felt most keenly by non-household customers with large premises and car parks (as these will be included in the chargeable area as per the Valuations Office Agency data upon which business rates are calculated).

Southern intends to use a third party to collect and validate data on premises sizes, although it was not made clear at this stage how ownership boundaries would be verified.

Five of the 11 wastewater wholesalers already use site area based charging for surface water drainage: United Utilities, Yorkshire Water, Northumbrian Water, Severn Trent and Hafren Dyfrdwy. Southern said the average wastewater bills for those five companies are the lowest in the industry.