United Utilities to increase water bills by 32%

United Utilities supplies millions of households in the north-west of England

Household water bills for millions of customers will rise by 32% over the next five years, United Utilities (UU) has announced.

The water company, which supplies Greater Manchester, Merseyside, Lancashire, Cumbria, most of Cheshire and parts of Derbyshire, said the increase had been negotiated in December with the regulator Ofwat as part of its price review.

Household bills will initially go up by an average of £86 from April.

The Consumer Council for Water (CCW) said it was concerned about people who were already struggling to make ends meet.

'Investment'

Over the next five years, the average annual rise in bills will be £31.

Ofwat explained, however, that water companies were expected to put up its tariffs by a higher amount in the coming 12 months.

Water companies have said they needed more money to fund infrastructure projects designed to reduce pollution incidents.

Additionally, the scheduled increases do not include inflation, which means actual bills will likely rise even more.

UU also announced it would raise dividend payouts to shareholders in line with inflation.

Its chief executive Louise Beardmore said increased bills would raise £13bn to invest in water infrastructure projects across the north-west of England.

She said this would be the "largest investment in water and wastewater infrastructure in over 100 years".

Ms Beardmore also pledged to provide £525m in financial support to approximately one-in-six households across the region during the next five years.

'A postcode lottery'

John Vinson, head of company engagement for the CCW, said at least two in five households were worried about how to afford rising water bills.

He said trust in UU and other water companies had never been lower.

"People tell us they want to see investment in improving services and protecting the environment," he said. "That money comes from customers' bills.

"We're most worried about the people who are already struggling to make ends meet and we know are already making difficult choices like cutting back on heating and eating.

"Existing support from water companies is a postcode lottery and does not go far enough."

'Legal obligations'

On Tuesday the Environment Agency (EA) announced it had secured a commitment from water companies to better tackle pollution.

Its Water Industry National Environment Programme set out more than 24,000 actions that water companies must take over the next five years to meet their environmental legal obligations.

The EA said this equated to £22.1bn of investment, and had been factored into negotiations about bill increase negotiations.

It said the investment would help protect future water supplies, boost natural habitats and biodiversity, and improve the quality of drinking water for consumers.