We all rely on water every day: at home, for work and for leisure, and so does nature and the wildlife we all enjoy. Water may fall free from the sky, but it takes a lot to make it safe to drink and also to deal with the water we use.
Ofwat protects your interests by, among other things, carrying out a price review every five years for water and wastewater services in England and Wales.
On this page you can find out:
- What is a price review?
- What happens in the price review process?
- How can I have my say on future services and bills?
- How does Ofwat prevent companies from being underfunded?
- How can I find out more about the 2024 price review?
What is a price review?
At home, most water services in England and Wales are provided by one of 17 water companies, and their wastewater services are provided by one of 11 of those water companies. So, most people receive their water services from a licensed monopoly. Only some business customers can choose their supplier.
Because competition is limited, there is a risk that these companies will not deliver the services their customers want. They may also charge higher prices to increase their profits. Therefore the water companies need to be regulated.
Ofwat protects water customers interests using a range of regulatory tools. That includes every five years, we decide the level of services all customers can expect to get. This will include how much it will cost to keep your services running efficiently including how much money should go to protecting the environment and meeting future water needs.
We call this a ‘price review’. It affects the services you can expect to get and the bills you pay.
We are currently working on our next price review, and we’ll be announcing our final decisions in December 2024. It’s called the 2024 price review or PR24 and it will set the levels of service and bills for 2025 to 2030.
What happens in the price review process?
Water companies submit their business plans to us every five years, setting out how much they intend to spend providing their services over the five-year period, and the amount of revenue that they feel they should be permitted to earn as a result from customers in the form of water and wastewater bills.
As part of the price review process, we expect companies to listen to their customers to understand their preferences and priorities and ensure that these are reflected in all aspects of their business plans.
One of Ofwat’s roles is to challenge these plans to ensure customers get the best service and price deal. We ensure that companies are funded to carry out all their obligations to their customers and the environment efficiently. This includes current and future customers. As part of our review, we set a limit on the total amount of revenue that each water company can recover from its customers in their bills.
How can I have my say on future services and bills?
Water companies will be developing their business plans for 2025 to 2030 before sending us them in October 2023. We expect companies to listen to their customers to understand their preferences and priorities and ensure that these are reflected in all aspects of their business plans.
You can contact your water company if you would like them to consider something specific for the future or in the services they deliver now. Companies will be contacting people in their local areas to do research too.
Each water company will be developing their 25-year plan for meeting demand for water. And each wastewater company will be developing their 25-year plan for meeting wastewater and drainage needs. They must publicly consult on these plans.
How does Ofwat prevent services from being underfunded?
Water companies develop their business plans for delivering services – including the spending they need for new reservoirs, treatment plants and pipes, which help contribute to the delivery of services now and in the future.
Each company’s business plan is based on their long-term plans to meet the supply and demand for services – and environmental and drinking water quality requirements, overseen by other regulators, such National Resources Wales, the Environment Agency and the Drinking Water Inspectorate.
We consult on our draft decisions publicly, on how we will go about setting revenue limits and on what those limits will be, to ensure we hear views from companies, customer representatives and other regulators.
Companies have the flexibility to spend more than we have allowed if it is needed, and in more extreme circumstances, they can ask us for more money. If companies disagree with our final decisions, they can appeal our decisions to the Competition and Markets Authority.
How can I find out more about the 2024 price review?
Our 2024 price review (PR24) is where we will set the levels of service and bills for 2025 to 2030. Read more about PR24.
We send out a regular email newsletter with the latest information about PR24. You can sign up to receive this straight to your inbox here. You can also unsubscribe at any time using the unsubscribe option at the end of any of the emails.