Regulator Ofwat has proposed that water companies in England and Wales return a total of £240 million to customers by 2030 due to underperformance on environmental and customer service targets during the 2025-26 period. The move is part of a broader plan to reduce bills for households and businesses, with an initial deduction of £107 million scheduled for 2027-28.

Among the water firms, Yorkshire Water is expected to face the largest charge reductions, amounting to £75 million starting in April 2027, followed by Thames Water, which could see a £46 million cut. However, these reductions may be offset by additional price increases. Ofwat has proposed permitting companies to raise tariffs by an additional £3.4 billion beyond the average 36 percent increase already agreed for the five-year period up to 2030.

Some suppliers that exceed their performance targets could be allowed to raise bills further, with Severn Trent and Northumbrian Water poised to receive the largest financial rewards. The overall impact on consumer bills will vary depending on the company and customer category.

Ofwat’s final decision on these proposals is expected by December 15, with changes slated to take effect from April 1, 2027.

The regulator’s announcement comes amid growing criticism of the water sector over repeated sewage spills, water supply failures, and high executive salaries. In response, Prime Minister Andy Burnham has pledged legislation aimed at enabling public ownership of underperforming water companies. Government officials are reportedly considering a potential £10 billion takeover of Thames Water, a deal put forward by current lenders, which could lead to temporary nationalization of the firm.

A government spokesperson emphasized the intention to challenge water companies that attempt to pass unnecessary costs onto consumers. They also highlighted plans to introduce stronger regulations designed to better protect customers, reduce pollution, and increase public oversight of the country’s water infrastructure.