Ofwat Approves £3.4 Billion Extra Spending for UK Water Utilities

The water regulator Ofwat has issued a provisional ruling allowing 13 water utilities in England and Wales to spend an additional £3.4 billion by 2030. This funding, granted after companies requested £4.3 billion for unforeseen costs, sits atop a previously agreed £104 billion investment program. The capital is intended to safeguard assets, support the development of AI data centers and new housing, and address the removal of PFAS and other forever chemicals from drinking water.

Five companies—Southern Water, Thames Water, Severn Trent, Wessex Water, and South East Water—received permission to raise customer bills before 2030 to recoup these costs. Southern Water customers face the steepest increases. Thames Water was specifically granted £301 million for a recycling plant in west London and a new reservoir in Oxfordshire, despite ongoing debt struggles and fines for unjustified dividends.

Environment Secretary Angela Eagle criticized years of underinvestment and toothless regulation, stating that the funds must be used strictly for agreed-upon fixes. Ofwat warned that expenditure can be clawed back if companies fail to deliver. The regulator will consult on the draft decision until September 24, with a final verdict expected in December.