Wessex Water is proposing its largest ever investment in water and sewerage services to improve the health of rivers, reduce pollution and create around 2,000 extra jobs across the region.
Around £3.5 billion of new investment is proposed between 2025 and 2030 – more than double the current five-yearly spend of around £1.5 billion – subject to regulators approving Wessex Water’s business plan, published today (2 October 2023).
Recognising the need for a step-change in infrastructure investment, Wessex Water is planning to boost the local economy as it delivers multimillion pound schemes across the region providing employment, apprenticeship opportunities and secure work for the local supply chain.
As well as providing security of water supply, ensuring the water system can cope with the growing demands from population growth and climate change, there will be a huge focus on improving river health, which will include:
- Reducing discharges from storm overflows through a programme of work that will include nature-boosting wetland creation – a record £400 million being invested.
- Stripping out nutrients from wastewater discharges in response to nutrient neutrality rules, unlocking new housebuilding across many parts of the region without damaging the water environment – a £900 million commitment.
- Safeguarding rivers and groundwater sources through demand and leakage reduction work so 16% less water is abstracted from the environment, while meeting everyone’s needs for the long-term.
Consultation with customers showed more than 60% supported the plan, but it will come at a cost. While the exact amount bills need to rise will be determined by the regulator, Wessex Water said it could average around an extra £13 a month in real terms by 2030. Bills will still be lower in real terms than they were 15 years ago, but any increase will be unwelcome and particularly difficult for customers struggling to make ends meet.
Recognising this, Wessex Water has committed to be the first company to eliminate water poverty by 2030, ensuring nobody spends more than 5% of their disposable household income on their water bill. To keep water bills affordable for all, it is also expanding its industry-leading affordability assistance programme.
Chief Executive Colin Skellett said: “This plan is all about striking the best possible balance for people and the planet at a time of crisis.
“We face a cost of living crisis; a climate and nature crisis; and a crisis of confidence in the water sector. For all these reasons, public and political scrutiny is rightly at an all-time high. At Wessex Water, we have recognised that we did not act quickly enough on storm discharges, we will now step up, inspire confidence and rebuild trust.
“For customers, we expect by 2030 average bills will have risen by £13 a month in real terms, after a decade of rises being held below inflation. We don’t underestimate how unwelcome this will be for many.
“We have minimised the increase by pursuing alternative and innovative approaches wherever possible, and we commit to protecting those who will struggle to pay. Our business plan contains the best balance we have been able to strike between increasing investment and keeping prices affordable.”
The investment in infrastructure will be shared between customers and Wessex Water’s long-term owner YTL, which is committed to ensuring the company remains financially resilient.
Mr Skellett added: “We’ve listened closely to our customers so the plan invests in areas that they care about. It will be challenging for us all, requiring shareholders to provide more investment and customers to pay higher bills.
“We are far from starting from scratch; we’re currently investing £1.5 billion between 2020 and 2025, which includes work well under way on reducing storm overflows, but recognise there’s more to do.”
Wessex Water’s business plan is based around eight priority areas that customers say are most important to them, which includes providing safe reliable water; sustainable abstraction to ensure we have enough water to meet the needs of people and nature; having an effective sewerage system to reduce the impact of storm overflows and sewer flooding; and providing excellent customer experience.
Wider environmental benefits include decarbonising the business and contributing to the wider net zero and circular economy agendas, while also increasing biodiversity.
Ofwat will scrutinise Wessex Water’s business plan for 2025-2030 before making an announcement next year determining how much customers can be charged.