Water companies’ projected spending for 2025-30 is expected to rise to almost £100 billion, Utility Week analysis reveals.
Customer bills are set to rise further to foot the additional costs, with eight companies already announcing additional hikes on top of those declared when business plans were first submitted in October 2023.
The majority of companies have now published updates to their PR24 plans in response to initial feedback from Ofwat, with only Thames yet to announce their revised costs. Portsmouth Water was the only company not to require an update since its October submission.
Utility Week analysis shows that around £1.9 billion in additional spending has been added to the PR24 total by the 14 companies that have published updates.
It has been widely reported that Thames will add between £1 billion and £1.5 billion to its business plan.
With an official update expected in the coming days, Thames’ total spend is forecast to rise to around £20 billion.
Including Thames’ expected additional costs, the total spending ask of PR24 business plans rises to up to £99.2 billion.
(Since this article was published Thames Water has published its plans.)
PR24 totex comparison – Original submissions vs updated costs
| Company name | Totex in October 2023 submission (£m) |
Totex now (£m) |
Change (£m) |
| Anglian Water | 9,305 | 9,522 | 217 |
| Hafren Dyfrdwy | 259 | 256 | -3 |
| Northumbrian Water | 6,027 | 6,020 | -7 |
| Severn Trent Water | 13,286 | 13,315 | 29 |
| South West Water | 4,447 | 4,469 | 22 |
| Southern Water | 6,606 | 7,172 | 566 |
| Thames Water | 18,700 | ? | ? |
| United Utilities | 13,677 | 14,198 | 521 |
| Wessex Water | 5,031 | 5,007 | -24 |
| Welsh Water | 5,101 | 5,627 | 526 |
| Yorkshire Water | 7,921 | 7,600 | -321 |
| Affinity Water | 2,124 | 2,127 | 3 |
| Portsmouth Water | 346 | 346 | 0 |
| South East Water | 1,937 | 1,888 | -49 |
| South Staffs Water | 819 | 817 | -2 |
| SES Water | 413 | 413 | 0 |
Speaking to Utility Week, independent analyst Martin Young said that the increased spending ask of water companies “underscores the capital raising needs of the sector”.
He added: “Pending an update from Thames Water, the PR24 revised sector totex ask could be slightly higher than the levels set out in business plan submissions in October, underscoring the capital raising needs of the sector.
“Water is not alone with these needs and there is global competition for infrastructure capital. As we move towards PR24 draft determinations on 12 June, Ofwat needs to ensure that it is a facilitator of new investment and not a blocker. That said, it is about fair calibration and not offering a free ride.”
Southern Water has so far announced the biggest increase in its spending plans, adding £566 million to its totex. It takes Southern’s total planned spending to more than £7.1 billion.
Southern said that the majority of additional spending will go towards its water industry national environment programme (WINEP) and tackling storm overflows.
However, it stressed that this was “not the final signed-off WINEP” as discussions are ongoing with regulators and “there remains uncertainty” around what activity could be pushed into the following asset management period (AMP9).
To cover the additional costs, Southern has brought average bills up to £727 annually, which is 7% higher than the average bill proposed in its original plan and 77% higher than customers are currently paying.
The company was already proposing the highest bills in the industry and has now added another £46 to what customers will have to pay by 2030.
United Utilities has also added more than half a billion pounds to its proposed totex, but has only increased bills by three pence. It said the difference allows for the delivery of a Biological Oxygen Demand scheme which has shifted from DPC (direct procurement for customers) to in-house delivery.
While it does not impact the anticipated cost of the scheme, it does mean United Utilities will procure and finance the projects instead of a third party. Additionally, £8 million on the totex relates to its expected involvement in a water transfer scheme for the Kielder reservoir.
Meanwhile, Welsh Water said its needs an additional £526 million to cover additional work needed to meet updated environmental regulations.
Anglian has also increased its totex by £217 million after including cost allocations for its two reservoir projects in the Fens and South Lincolnshire.
However, not all companies have announced rises, with five companies reporting decreases in their PR24 projected spending.
Yorkshire has announced the biggest decrease, slashing its PR24 totex by £200 million. The company said the decrease was “largely a result of subsequent changes made to its draft water resource management plan (WRMP) and rephasing of its WINEP”.
Northumbrian has also dropped its Totex costs by £7 million but stressed that is contingent on Defra approving an “ambitious” approach to nutrient neutrality.
It was one of many companies that stressed that further changes expected to be made to legal and regulatory requirements will likely need to be reflected in the final determinations when they are made in the autumn.
Change in 2030 bill – Original prices in PR24 plans vs update prices
| Water and wastewater companies | Proposed 2030 bill in original plans (£) | Proposed 2030 bill after update (£) | Difference (£) |
| Anglian Water | 571 | 573 | 2 |
| Hafren Dyfrdwy | 560 | 559 | -1 |
| Northumbrian Water | 464 | 478 | 14 |
| Severn Trent Water | 546 | 547 | 1 |
| Southern Water | 681 | 727 | 46 |
| South West Water | 621 | 596 | -25 |
| Thames Water | 609 | ? | ? |
| United Utilities | 556 | 556 | 0 |
| Welsh Water | 581 | 602 | 21 |
| Wessex Water | 668 | 666 | -2 |
| Yorkshire Water | 585 | 569 | -16 |
| Affinity Water | 217 | 217 | 0 |
| Portsmouth Water | 135 | 135 | 0 |
| South East Water | 277 | 280 | 3 |
| South Staffs Water | 182 | 182 | 0 |
| SES Water | 260 | 262 | 2 |
Ofwat is due to unveil its draft determinations on 12 June. The regulator’s senior PR24 director Chris Walters recently told Utility Week to expect more changes between draft and final determinations as regulatory discussions and policy decisions continue to be made.
The ramifications of these, Walters admitted, could see investment go up further despite affordability pressures.