Business · Economy · 7 hrs ago
Water firms could return £107m to English and Welsh customers
Ofwat has proposed £107m in bill reductions for water customers in England and Wales in 2027-28.
The draft penalties are for companies that missed service and environmental targets during 2025-26.
Yorkshire Water and Thames Water face the largest deductions, at about £75m and £46m respectively.
The system links companies’ payments to performance because customers cannot switch water providers when service falls short.
Some companies that met their targets could receive extra payments, which may raise their customers’ bills.
The proposed reductions are part of a wider expected net bill cut of £240m through 2029-30, but they come as bills are already set to rise to fund investment, alongside an approved average increase of 36% over five years to 2030.
Ofwat will make its final decision by 15 December, and the changes are due to take effect from 1 April 2027.
Ofwat’s draft proposals could return £107 million to water customers in England and Wales through lower bills in 2027-28.
The regulator says the water industry’s bills would fall by a net £240 million because of performance failures during 2025-26.
Yorkshire Water and Thames Water face the largest deductions, while Severn Trent and Northumbrian Water are due reward payments for meeting targets.
Ofwat will make its final decision by 15 December, with the adjustments due to take effect from 1 April 2027.
Separate plans allowing companies to raise annual bills by an additional £3.4 billion could offset savings for households.
- Who
- Ofwat, the water regulator in England and Wales, and water companies including Yorkshire Water and Thames Water.
- What
- Draft proposals could return £107 million to customers through lower bills in 2027-28, while some suppliers would receive reward payments.
- When
- The proposed bill adjustments relate to performance in 2025-26 and are due to take effect from 1 April 2027. Ofwat’s final decision is due by 15 December.
- Where
- England and Wales.
- Why
- Companies would face financial deductions for missing performance targets, while some would receive rewards for meeting or exceeding them.
This story does not have two clearly opposing sides.
Water companies’ performance against targets determines proposed deductions and rewards.
Ofwat’s draft proposals for bill adjustments are reported.
Ofwat is due to make its final decision on the payments.
The proposed bill adjustments are due to take effect.
£107 million is expected to be returned to customers through lower bills.
- Proposed customer returns
- £107 million in 2027-28
- Net industry bill reduction
- £240 million
- Yorkshire Water deduction
- £75.1 million, according to the Guardian
- Thames Water deduction
- £45.8 million, according to the Guardian
- Final decision deadline
- 15 December
- Bill adjustment start date
- 1 April 2027
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What people are saying
affected by a range of factors and the effect will vary by company and customer type
cannot be treated as a blank cheque
This government won’t allow customers to be treated as a blank cheque, and we are committed to protecting households from cost-of-living pressures.