Image description: Aerial shot of water treatment centre. Image by Tom Fisk / Pexels.
What
A report by the campaign group Windrush Against Sewage Pollution (Wasp) has found that upgrading a sewage works serving the Oxford area will cost £435m, more than 10 times the £40m cost quoted when the project was proposed. The sewage works is expected to serve between 255,000 and 267,000 people.
This has led to accusations that water companies are spending many times more on refurbishment projects than operators in comparable countries “without a credible explanation”. For comparison, it cost £29m to build a new sewage works in Assens, Denmark, where the cost of living is on average 13% above that of the UK and the cost of water and sewerage is one of the highest in Europe. It was designed to cater for a population of 100,000, with the capacity to upgrade to 150,000. Sewage treatment works cost less to build in the US, too, where the benchmark cost for a new plant serving approximately a million people is £248m.
The National Audit Office (NAO) has further confirmed water firms overspent on infrastructure building, with some of these costs being added to consumers’ bills. Meanwhile, only 1% of water companies’ actions to improve environmental performance, such as improving sewer overflows, have been inspected by the Environment Agency, the authors of the NAO report said.
Ofwat investigating
WASP argues Ofwat’s approach to regulation has distorted the way companies use their funding and report their spending. “The regulator’s hands-off approach to auditing and detail has allowed companies to game the system,” it said. It is also notable Ofwat itself is facing legal action for allowing water companies to pass the costs of their own investment failures onto the public.
Responding to WASP’s claims, Ofwat said that although they will not be formally investigated, there will be greater scrutiny overall of how water upgrades are delivered in the wake of planned increases in investment.
Image description: Home energy meter. Image by Sian Wynn Jones / Pexels.
Awful April as cost of living spirals
This news comes as April sees significant increases in essential living costs, prompting protests and concerns about affordability. According to Ofwat average water bills will see a rise of 26%, translating to an additional £123 for consumers this year. This increase comes amid a broader context of escalating household expenses, including energy bills, which are projected to rise by 6% during the same period. The combined increase of £233 in average water and energy bills pushes total yearly payments to around £2,000, a substantial burden for many. Other household expenses are also on the rise, as council tax rates are projected to increase, with some local authorities bypassing the 4.99% cap for social care duties.
Shadow environment secretary Steve Reed said: “It is shocking that during a cost-of-living crisis, consumers are now being expected to pay the price, while water chief executives are pocketing millions in bonuses… we will force the water companies to clean up their filth through severe fines and make bosses responsible for their negligence”. The last time bills rose at this rate was just before the global financial crash, between 2004-05 and 2005-06.
In the midst of these financial pressures, some residents have turned to protests and boycotts to voice their dissatisfaction. The Consumer Council for Water has warned against boycotting bills, as it could lead to detrimental effects on credit ratings and potential debt recovery actions. “The implications of not doing so can be very damaging for a household,” they cautioned. Ofwat have also provided guidance on the assistance available for paying bills.