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Water Companies

Volume 738: debated on Monday 16 October 2023

The price review is an independent, five-yearly process run by the economic regulator, Ofwat, to determine investment plans for water companies and customer bills over the next five years—in this case, from 2025 to 2030. This will include assessing future investment in enhancing the resilience of our water supplies, environmental improvements and customer support.

Following Ofwat’s timeline, I can inform the House that by Monday 2 October all water companies had submitted draft business plans for the 2024 price review (PR24) and published them on their websites.

The draft water company business plans submitted are the opening position in an independent regulatory process stretching to the end of 2024. I expect Ofwat and the Environment Agency now to look closely at the plans and ensure that they meet legal requirements and give customers the best value for their money. We do not allow water companies to charge consumers twice for investment that should already have happened, and through the PR24 process Ofwat will scrutinise business plans to ensure this does not occur.

Following this scrutiny process, Ofwat’s decision on total investment and consumer bills will be finalised in December 2024.

This builds on Ofwat’s announcement on 26 September that, following its assessment of water company performance against targets set for 2022-23, under-performance by the majority of companies means £114 million will be returned to customers next year.

I am also taking this opportunity to update the House on recent developments pertaining to the Government’s actions to reduce discharges from storm overflows.

On Friday 15 September the High Court ruled in favour of the Government’s storm overflows discharge reduction plan, following challenges brought by WildFish and others. All claims were dismissed, meaning the Government won on all grounds considered by the High Court. The judgment supports the Government’s position that the targets under the Government’s plan goes substantially further than existing legislation to tackle the use of storm overflows.

The Government welcome the High Court’s decision and have always been clear that we will go further and faster to tackle the issue of storm overflows wherever possible.

That is why on Monday 25 September, following consultation, the Government published an expanded “Storm Overflows Discharge Reduction Plan”, extending the targets of the plan to coastal and estuarine storm overflows. We have also expanded the list of storm overflows that are prioritised for early improvement, to include both marine protected areas and shellfish water protected areas.

The targets outlined in the expanded storm overflows discharge reduction plan provide an achievable, credible route to tackling sewage and delivering the improvements that customers expect without disproportionately impacting consumer bills.

Furthermore, recognising public calls for action to tackle plastic pollution in waterways, on Saturday 14 October the Government also launched a public consultation on a proposed ban of wet wipes containing plastic. This will help tackle wet wipes containing plastic breaking down into microplastics over time, which can be harmful to the environment and human health. The consultation delivers on DEFRA’s commitments set out in our “Plan for Water”.