Image description: Gold statue of the blindfolded Lady of Justice, holding a sword in one hand and weighing scales in the other. Image by Sang Yun Cho / Pixabay
Environmental charity River Action has been granted permission by the High Court to proceed with a legal challenge against the water regulator, Ofwat, over how customers are billed.
River Action want to challenge the approach Ofwat took when it set the price that water companies can charge customers. Back in December, Ofwat announced household water bills in England and Wales would increase by an average of £31 a year over the next five years, higher than the draft proposals of around £20.
The charity believes Ofwat’s approach was unlawful and, as a result of regulatory failings, the financial burden of water industry infrastructure neglect has been pushed onto customers, rather than those responsible. The group claimed Ofwat’s 2024 Price Review approved above-inflation bill increases, without guaranteeing the money would be spent on maintenance. River Action said it believed that allowed water firms to charge customers twice: first, with bills that should cover infrastructure, and, second, through new hikes aimed at fixing the same problems. River Action also questioned whether the regulator would have the ability to claw back funding if it had been misused. The funding is alleged not to address “all relevant information”, such as the 6,000 hours of raw sewage that was pumped into Lake Windermere by United Utilities over 2024. Raw sewage was released into England’s rivers and seas for a record 3.61 million hours last year.
Commenting on the action, an Ofwat spokesperson said: “We reject River Action’s claims. The PR24 process carefully scrutinised business plans to ensure that customers were getting fair value and investment was justified.”
“We agree that customers should not pay twice for companies to regain compliance with environmental permits, and have included appropriate safeguards in our PR24 determinations to ensure this – which we will monitor closely, taking action if required,” they added.
Water companies must publish Pollution Incident Reduction Plans
As of June 23rd, water companies must be transparent in their efforts to prevent pollution as a new legal requirement in the Water (Special Measures) Act comes into force (Section 3). The new rules make it mandatory for water companies to prepare and publish Pollution Incident Reduction Plans (PIRPs).