Millions of households in England face higher water bills over the next five years after the Competition and Markets Authority provisionally backed fresh price rises for five suppliers. An independent panel appointed by the CMA said the firms can charge customers an extra £556m in total, far below the £2.7bn they asked for. The move gives Anglian Water, Northumbrian Water, Southern Water, Wessex Water and South East Water scope to raise bills more than previously set, while stopping most of the increases they sought. The decision sets the stage for a renewed fight over who pays for long-term upgrades to ageing water networks and how regulators balance investment and affordability.
The CMA’s provisional view limits the extent of the rises but still points to higher costs for households already under pressure from living costs. The companies argued for bigger allowances to fund infrastructure, improve reliability and meet environmental targets. The regulator agreed to some extra funding but rejected most requests, signalling a tougher line on efficiency and value for money.
Context and timing
The CMA published its provisional decision on Thursday, 9 October 2025. The case covers five water companies operating across large parts of eastern and southern England and the North East. The decision applies to the five-year price control period that runs from 2025. The authority will now take feedback before it issues a final determination.
What the CMA decided and who it affects
The CMA provisionally approved £556m in additional charges for the period to 2030. That figure represents about 21% of the £2.7bn the five companies requested. The decision affects customers of Anglian Water (East of England), Northumbrian Water (North East and parts of Essex and Suffolk under its Essex & Suffolk brand), Southern Water (Hampshire, Isle of Wight, Sussex and Kent), Wessex Water (South West and parts of Dorset, Somerset and Wiltshire), and South East Water (parts of Kent, Sussex, Surrey, Berkshire and Hampshire).
The regulator’s view means bills for these customers will rise more than expected under earlier plans. The scale and timing of any increase will vary by company. The CMA’s panel weighed the companies’ arguments for extra funding against consumer interests, environmental goals and the need for efficient delivery. By granting only a fraction of the request, the CMA signalled that it expects the firms to do more within existing budgets.
Why the appeals reached the CMA
Water companies can appeal price limits when they disagree with the sector regulator’s final plans. The firms argued that they needed more money than allowed to deliver investment programmes over the next five years. They pointed to population growth, climate change, resilience needs and stricter environmental standards as drivers of higher costs. The CMA review serves as a check on those claims. It looks at the evidence for costs and performance, and it tests whether the proposals offer value for customers.
The appeals process often turns on detailed assessments of cost allowances, service targets and how companies share risks with bill payers. The CMA’s provisional stance suggests it accepted some elements of the companies’ cases but found most requests unjustified or too high. By doing so, it upheld the principle that companies must demonstrate efficiency and clear benefits before customers fund extra spending.
What this means for household bills and affordability
Households in the regions served by the five firms should expect bills to rise more than they would have under earlier determinations. The exact increase will depend on each company’s plan and how the final decision lands. The total extra revenue of £556m will spread over five years and across millions of customers, so the per-household impact will vary. Customers already face higher charges in the next control period as companies invest in water quality, supply resilience and network upgrades.
Affordability will remain a central concern. Consumer bodies have warned that low-income households struggle with rising utility costs. Water companies operate social tariffs and other support schemes, but coverage and eligibility vary by region. The CMA’s decision keeps most of the requested increases off bills, which eases some pressure. However, any rise will still add to household outgoings. The debate over a consistent, national approach to water affordability is likely to intensify as the new price period begins.
Investment, service performance and environmental commitments
The companies sought higher charges to fund projects such as replacing ageing pipes, reducing leakage, improving river and coastal water quality, and boosting drought resilience. These aims reflect wider pressures: more frequent extreme weather, population change and the need to cut pollution incidents. Regulators and policymakers want faster progress, but they also want companies to deliver it at lower cost to customers.
The CMA’s partial approval suggests it found credible grounds for some extra investment while pushing back on costs it viewed as excessive or unproven. The regulator expects companies to hit performance targets and deliver upgrades efficiently. It can also apply incentives and penalties tied to service measures, which affect what customers pay. That framework aims to align bills with outcomes that matter to the public, such as fewer supply interruptions, better environmental performance and reduced leakage.
Corporate finances and accountability
Investors and credit analysts will study the CMA’s stance for signals on returns and risk. A lower allowance than requested tightens funding and may lead companies to reorder priorities. It also increases scrutiny of dividends and executive pay when customer bills rise. Politicians and campaigners have called for stronger accountability in the sector, especially where companies fall short on service or environmental performance.
The CMA process adds an independent layer of review to decisions that affect household budgets. By trimming most of the requested increases, the authority reinforced the message that companies must justify every pound billed to customers. That line may help rebuild trust after years of public concern about sewage spills, leaks and service failures. It also raises the bar for any future requests to lift bills during the period.
What happens next and how customers can engage
The CMA issued a provisional decision, not a final one. It will consider feedback from the companies, consumer advocates and other stakeholders before it confirms its view. The authority typically sets out how stakeholders can submit responses and the deadlines for doing so. Customers can look up information on their provider’s website and the CMA’s site to understand the likely impact on their bills and any support available.
Once the CMA publishes its final determination, the five companies must align their charges and plans with the outcome. Ofwat, the sector regulator, will continue to monitor performance, enforce service commitments and apply incentives or penalties where needed. That oversight sits alongside environmental and quality standards enforced by other regulators. Together, the framework aims to deliver long-term investment while protecting customers.
Wrap-up
The CMA’s provisional decision grants five English water companies a limited uplift in charges, approving £556m over five years and rejecting most of the £2.7bn they sought. The ruling points to higher bills for millions of households, but it also restrains the size of the increases and underscores a firm stance on efficiency and value. The outcome steers the sector toward targeted investment in resilience and environmental performance, with tighter checks on costs. Customers now await the final determination and clearer guidance on what the changes mean for their region. As the next five-year period begins, pressure will grow on companies to deliver visible improvements, on regulators to hold them to account, and on policymakers to strengthen support for households who struggle with rising bills.