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CMA granted 6 month extension for price review
Ofwat has granted the UK’s Competition and Markets Authority (CMA) request for an additional six months to redetermine price reviews for five water companies.
- Anglian Water
- Northumbrian Water
- South East Water
- Southern Water
- Wessex Water
The process normally takes six months; however, the CMA is permitted to request an extension of a further six months, to which Ofwat has agreed. The CMA requested the extension given the nature and scale of the work involved in assessing the price controls for the five water companies and the associated procedural complexity. Ofwat had formally referred the requests from five companies for a redetermination of their PR24 Final Determination to the CMA in March this year. The CMA now has until 17 March 2026 to complete its report on the references, although it may do sooner.
Delay in customer charge decision
The CMA’s extension delays a decision on how much Water Companies be allowed to charge customers and return to investors.
From this month, water bills for all water companies in England and Wales went up by an average of 33 per cent, or £86, a year, generating £104bn of investment into the water sector in the next five years. However, according to a study published this week by the University of Greenwich, more than a third of water bills in England and Wales are not used for water services at all: on average, 35 per cent of money from customer bills in the year from 2023 to 2024 was used to pay the interest on water companies’ debt and as dividends to shareholders. The study also suggests that only £44bn of the £104bn will be directly available for new sewage works and reservoirs.
Calls for government and Ofwat to end water bill ‘postcode lottery’
Meanwhile, the body representing independent water networks has called on the Government and water regulator, Ofwat, to introduce a single social tariff for water bills that would end the ‘postcode lottery’ of customer support that is available.
Without a national scheme ensuring that everybody receives the same level of support, no matter who their supplier is, the help people receive currently varies depending on where they live. For example, customers on a social tariff in Yorkshire on average receive a £228 reduction to their bills, compared with just £110 for those in the south of England. With water bills rising, the Independent Networks Association (INA) has restated its call for a social tariff for water bills.