{"id":486425,"date":"2025-10-09T19:27:12","date_gmt":"2025-10-09T19:27:12","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/486425\/"},"modified":"2025-10-09T19:27:12","modified_gmt":"2025-10-09T19:27:12","slug":"the-bills-are-water-torture-and-so-is-the-regulatory-process-in-england-nils-pratley","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/486425\/","title":{"rendered":"The bills are water torture \u2013 and so is the regulatory process in England | Nils Pratley"},"content":{"rendered":"

Customers already knew their water bills rose steeply in April. Now 14.7 million people in England supplied by five companies<\/a> \u2013 Anglian, Northumbrian, South East, Southern and Wessex \u2013 will suffer steeper increases<\/a>. That\u2019s the bad news for them. The vague consolation is that the outcome could have been worse.<\/p>\n

Strange as it may look at first glance, none of the five firms got close to what they wanted when they trotted off to the Competition and Markets Authority<\/a> to complain that Ofwat, the economic regulator, should have whacked up bills even further.<\/p>\n

Take Southern Water. Ofwat granted a mighty 48% increase in bills to \u00a3620 but the company thought \u00a3710 was needed; in the event, the CMA landed on \u00a3638. For Anglian and Northumbrian, the CMA\u2019s top-up was a mere 1%, and even that increase seems to have owed everything to the application of updated market prices to calculate companies\u2019 cost of equity (one of the three main considerations in the process).<\/p>\n

In a way, the beleaguered Ofwat can chalk it up as a minor moral victory. The companies\u2019 requests for extra funding were \u201clargely unjustified\u201d, said the CMA \u2013 it allowed only 21% of the extra money they wanted for spending. That still adds up to the large figure of \u00a3556m to come from household and business customers but, for the most part, Ofwat\u2019s homework withstood the remark.<\/p>\n

Yet the whole process feels surreal. First, note we\u2019re not talking about an appeal but a \u201credetermination\u201d. In other words, the CMA was not asked to act as a football-style video assistant referee and opine on whether Ofwat had made clear and obvious errors in balancing bills and companies\u2019 funding needs. Instead, the competition regulator, in a sideline to its day job, had to rerun the entire price-control process of the specialist regulator \u2013 and do so in 12 months, whereas Ofwat gets four years. That makes little sense.<\/p>\n

Second, the regulatory system is about to be ripped up anyway after a couple of decades of sewage scandals and financial engineering. The government has already said Ofwat will be abolished<\/a> in a \u201creset\u201d of a sector that has been \u201cfailing the environment, customers and investors\u201d. In a last hurrah, the CMA had to ensure this \u201cbroken\u201d system, as it applied to the five companies, was applied correctly.<\/p>\n

The CMA\u2019s findings are only provisional but, on the safe-ish assumption that the final figures resemble Thursday\u2019s, a third absurdity possibly awaits. Remember that a request for a redetermination is a formal matter: the board of directors has to make a case that Ofwat has left them unable to meet regulatory requirements. So what do you do if, like Anglian\u2019s directors, you asked for an extra 10% but got only 1%? Resign en masse? Unlikely. But if you don\u2019t, aren\u2019t you accepting that you didn\u2019t need to go to the CMA in the first place?<\/p>\n

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Still, the real drama in the sector remains at Thames, which (after being granted two extensions) has until 22 October to decide whether to go to the CMA. The deadline could become redundant if Thames sinks into special administration, AKA temporary nationalisation, or if the bondholders<\/a> are allowed to take control, or if yet another extension is granted. If Thames does go to the CMA, a final decision may arrive in mid-2026 for bills that took effect in April 2025. This is water torture.<\/p>\n","protected":false},"excerpt":{"rendered":"Customers already knew their water bills rose steeply in April. Now 14.7 million people in England supplied by…\n","protected":false},"author":2,"featured_media":486426,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[748,393,4884,12,1144,712,16,15,1764],"class_list":{"0":"post-486425","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news","8":"tag-britain","9":"tag-england","10":"tag-great-britain","11":"tag-news","12":"tag-northern-ireland","13":"tag-scotland","14":"tag-uk","15":"tag-united-kingdom","16":"tag-wales"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115345859846127181","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/486425","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=486425"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/486425\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/486426"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=486425"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=486425"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=486425"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}