Severn Trent customers face paying an additional £3 on their annual water bill from 2027/28, rising to £5 by 2029/30, under provisional plans announced by the industry regulator.
Ofwat has provisionally approved £329 million of additional expenditure for Severn Trent Water as part of a wider £3.4 billion investment package covering the water sector.
The bill increases relate only to the new funding announced through Ofwat’s Cost Change Process and come on top of changes already permitted under the regulator’s five-year price settlement.
Severn Trent had requested £481 million through the process, meaning Ofwat has provisionally approved around 68% of the company’s application.
The regulator’s figures show the expected additional effect on the average Severn Trent bill will be:
- £3 a year in 2027/28
- £5 a year by 2029/30
The £5 figure represents the projected annual impact in 2029/30, rather than a further £5 increase on top of the £3.
Ofwat said the additional Severn Trent investment would include work to increase wastewater treatment capacity, helping to support the construction of new homes.
The company’s submission also covered investment relating to the condition of existing assets and regional growth.
Severn Trent’s average combined household water and wastewater bill is already around £587 for 2026/27 — an increase of £52, or approximately 10%, compared with the previous year. Individual bills vary according to factors including water use, whether a property is metered and its rateable value.
£3.4bn provisionally approved across the sector
Ofwat introduced the Cost Change Process to allow companies to seek additional funding for priority projects whose costs were uncertain or unknown when the regulator completed its 2024 Price Review.
The mechanism means work can begin before the next full price review, which is scheduled for 2029.
Thirteen companies submitted requests totalling almost £4.3 billion. Ofwat determined that £3.53 billion was within the process’s scope and has provisionally approved £3.39 billion — around 96% of the eligible expenditure.
A total of £752 million was ruled outside the agreed scope or was not supported by sufficient evidence. A further £143 million was rejected because Ofwat identified gaps in cost estimates or in the analysis used to support the proposed projects.
Only five of the 13 companies will be permitted to recover some of the newly approved funding through customers’ bills before 2030.
The provisional increases are:
| Water company | Additional bill impact in 2027/28 | Additional bill impact in 2029/30 |
|---|---|---|
| Severn Trent Water | £3 | £5 |
| Southern Water | £43 | £37 |
| Thames Water | £3 | £5 |
| Wessex Water | £4 | £7 |
| South East Water | £0 | £1 |
The effect of some other expenditure will be deferred until the next price-control period, beginning in April 2030.
Funding linked to delivery
Ofwat said conditions would be attached to parts of the funding, with companies required to provide further information before final approval.
Price Control Deliverables will set out what each company is expected to achieve. Money can be returned to customers if companies fail to deliver the required projects or outcomes.
Helen Campbell, executive director for delivery at Ofwat, said: “Our 2024 Price Review decisions are already enabling a £104bn programme of investment to produce better outcomes for customers, communities and the environment.
“The Cost Change Process strengthens the ability of companies to deliver without delay. The newly agreed funding will help unlock much-needed new housing development and boost business growth across a range of sectors, as well as improving drinking water quality and the removal of PFAS and forever chemicals.
“We will track performance to ensure companies are delivering the expected improvements for customers and the environment. If they don’t, expenditure can be clawed back.”
The package also includes £1.2 billion to protect water services and assets, £477 million to support growth including housebuilding and data centres, and £34 million to manage PFAS — commonly described as “forever chemicals” — in drinking water.
Ofwat’s decision remains provisional. A public consultation is open until 17:00 on 24 September 2026, with final determinations expected in December.
