Anglian Water appeals against ‘unacceptable' curb on bill increases

The Guardian

18-02-2025

Anglian Water has asked the UK's competition watchdog to allow it to hike bills over the next five years even more than it has so far been allowed to, as it called a ruling by the water regulator 'unacceptable'.
The water company, which serves 4.3 million customers across the east of England and Hartlepool, has appealed to the Competition and Markets Authority (CMA) to back its original business proposal to raise bills by 32% from £491 to £649 between 2025 and 2030.
Anglian hopes to overturn a decision by the water regulator for England and Wales, Ofwat, which shot down that proposal in December and said it should only be allowed to raise customer bills by 29% to £631 over that period.
Ofwat's ruling would allow Anglian to spend £11bn over the next five years – £4bn more than over the last five years – on projects including on two new reservoirs in Lincolnshire and Cambridgeshire.
But the firm, which is counted as one of the performance laggards by Ofwat, has hit out at that decision, claiming it heaped additional pressures on the business as it tries to invest in its water and sewerage infrastructure.
'In the east of England, with four of the fastest growing cities in the UK, as well as the Cambridge-Oxford arc, the levels of investment needed are significant,' the Anglian chief executive, Mark Thurston, said.
'Ofwat's stated aims for this settlement were to align the interests of companies and investors to those of customers, by setting the appropriate balance of risk and return,' he added.
'Unfortunately, after extremely careful consideration, the Anglian Water board has concluded that Ofwat's final determination falls short of its own stated aims, and having already factored in nearly £1bn of efficiency savings, it means that additional pressures in the regulatory settlement are unacceptable,' Thurston said.
Anglian's appeal to the CMA comes just days after troubledThames Water lodged its own complaint with the competition regulator last week.
Thames Water, which is on the verge of financial collapse, had wanted to raise bills by 59% over the next five years, arguing that it needed the extra funding to invest and improve its services. Ofwat had approved a 35% hike.
Neither of the attempts to appeal will affect bills for the financial year starting in April, and Anglia said it would not delay its investment plans for year-one of its business plan.
Sign up to Business Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
Thurston said: 'We do not take this decision lightly and having given serious consideration to our customers and to all of our other stakeholders we have concluded we must make use of the next step in the regulatory process and ask the CMA to reconsider whether the right balance has been struck.'
Thurston, who was the boss of the HS2 rail link until 2023 and an executive for the 2012 Olympic Games in London, was appointed to lead Anglian last year. Thurston made headlines at the high speed rail project for being the highest paid civil servant, earning £644,999r.
The CMA is under pressure to deliver on the Labour government's 'pro-growth' agenda. Its chief executive, Sarah Cardell, told the Guardian that the watchdog needs to 'go further is to make sure that perceptions of the regime haven't created a chilling effect'.