Water companies must urgently explain rising bills, fix crumbling infrastructure and clean up pollution if they want to regain public trust, according to a damning report from the Public Accounts Committee (PAC).
With water bills set to rise by an average of £31 a year over the next five years – the fastest increase in two decades – MPs say companies are demanding more money without clearly stating how it will be spent. One in five households are already struggling to pay.
Ofwat has been told to set clear expectations within six months, requiring firms to explain what customers are getting in return.
“Customers are being expected to shoulder the burden of water companies’ failings, without being told why or on what their money will be spent,” said PAC Chair Sir Geoffrey Clifton-Brown.
The report finds that failure to maintain ageing water networks has caused widespread pollution and pushed the sector to the brink.
If mains replacement continues at current rates, it would take 700 years to replace the entire network.
The PAC wants Ofwat and the Environment Agency (EA) to establish proper infrastructure inspection and monitoring standards before the next business planning cycle in 2028.
On pollution, MPs criticised the failure to distribute an £11 million Water Restoration Fund announced in 2024, calling on Defra to release the funds and make sure all future fines are reinvested in system improvements.
Companies are expected to spend £12 billion on storm overflows over five years – but that will only tackle 44% of them.
MPs also blasted regulators for slowing down housing developments due to water supply and treatment shortfalls.
The EA must now publish a list of developments it is delaying and set out how it will enforce environmental limits. Ofwat should also be ready to reopen the price review if urgent infrastructure investment is needed for housing or business growth.
The report highlights severe financial risks, with 10 water companies unable to meet interest payments last year and growing fears around potential insolvencies.
The PAC wants Ofwat to review its powers and set out who would foot the bill if a major company fails.
Above all, the report slams the lack of a clear strategy or coordination across the sector, calling for Defra to fill regulatory gaps and stop waiting for the Water Commission’s final report to act.
The message is clear: fix the system fast, or the problems – and public anger – will only grow.
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