Sorting out sewage dumping by water companies will cost hundreds of billions of pounds and ultimately be paid for by customers, a new House of Lords report has found.
Funding required for the upgrade to the UK’s sewage infrastructure is just too large to come from public funds, the Lords’ Industry and Regulators Committee added.
All parties agree on the problem, a Victorian-built sewage system that is crumbling, but there is less consensus on how to pay for an overhaul.
Bills will have to start rising from 2024, when Ofwat carries out its next price review, according to the report, with a social tariff necessary to help poorer customers cope.
Ofwat’s role also needs to be better defined, the report said, with its aims of keeping water costs low while ensuring sufficient investment seemingly contradictory.
Earlier this week, Ofwat warned the water companies their dividends might be restricted if the pollution in Britain’s seas and rivers does not improve.
Shares in Pennon today eased by 1.4% to 848p, United Utilities by 1% to 1,033p and Severn Trent by 1.8% to 2,757p.