Why are water bills increasing as Ofwat plans to abolish it?

Ofwat's budget has significantly increased, and these costs are ultimately passed on to households through higher water bills, even during the transition to a new regulator.

What is Ofwat and why is it being abolished?

Ofwat is the economic regulator of the water industry in England and Wales. It is being abolished as part of a government overhaul to replace the 'broken' regulatory system with a new single regulator.

How much has Ofwat's budget increased?

Ofwat's budget has soared by nearly a third, reaching £72 million for 2024-25, more than double its 2020-21 budget of £32.1 million.

Home / Business and Economy / Water Bills to Rise as Ofwat Budget Doubles

Water Bills to Rise as Ofwat Budget Doubles

29 Dec

•

Summary

Ofwat's budget increased by 28% to £72 million.
The regulator's budget has more than doubled since 2020-21.
Households will fund the budget increase amid infrastructure needs.

Water Bills to Rise as Ofwat Budget Doubles

Water bills are anticipated to rise significantly as the budget for the existing industry regulator, Ofwat, has surged by 28% to £72 million for the 2024-25 period. This substantial increase follows a trend, with Ofwat's budget more than doubling since 2020-21, when it stood at £32.1 million. This growing expenditure, ultimately funded by households, comes at a time when consumers are already facing increased costs for essential water infrastructure repairs and environmental clean-ups.

Despite plans announced earlier this year to abolish Ofwat as part of a wider overhaul of the regulatory system, its budget has ballooned. Environment secretary Steve Reed had stated his intention to scrap Ofwat, citing its failure to ensure adequate investment by water companies. A new, singular regulator is planned to replace several bodies, with a mandate to prioritize customers, investors, and the environment. However, families are now expected to subsidize nearly a third increase in Ofwat's budget during this transition period.