Axbridge News: Ofwat restricts South West Water’s price hike to 13% despite inflation falling to around 2% (but no word on Cheddar Reservoir 2)

By Harry Mottram: Cheddar Reservoir, Bristol Water and the waters of the River Yeo that emerges in Cheddar Gorge all belong to the Pennon Group based in Exeter whose main firm is South West Water (SWW). The company wanted to hike bills in their area which includes much of the South West by more than the 13% increase agreed by water regulator Ofwat from March 2025 – although the figure is much higher than inflation which is around 2%.

It means consumers will pay £12.80 a year more for the next five years resulting in annual average household bills totalling £561. Customers on average in the area will pay £64 extra a year on bills until 2030.

The water company however said it would work with Ofwat over the increases proposed by the water regulator suggesting the matter was not completely settled. Following the election when pollution in rivers and seas was one of the subjects that galvanised opinions as much of the pollution was from leaks by the utilities water is a political issue. The hikes in prices are aimed at replacing leaking pipes and reducing sewage discharges by providing the cash to do the work. Ofwat want SWW to make a 58% reduction in storm overflow spills and also said they must invest in a progamme of £750 million for improvements and to reduce ‘dirty’ incidents by 30% with an investment of £140m to prevent nutrient pollution in rivers.

A SWW spokesperson told the BBC: “We welcome Ofwat’s recognition of the quality of the business plans for Pennon Group businesses, underpinned by significant customer and stakeholder support. South West Water’s business plan for Bournemouth, Bristol, Cornwall, Devon, and the Isles of Scilly has been categorised as outstanding and is recognised as a ‘leading plan’. Having acquired Sutton and East Surrey Water in January 2024, Ofwat has assessed this plan as standard, confirming this plan is ‘generally good’.”

Customers must now a wait to see how things progress with an eye on SWW’s plans for Cheddar Reservoir 2. Axbridge News understands there is no change to the official Government’s national Plan For Water published in April 2023 despite the new occupant of 10 Downing Street. South West Water’s CEO Susan Davey said in March this year that Cheddar Reservoir was the firm’s first major infrastructure project and was in effect at the top of their agenda. At the time she said more detailed plans would be published this summer – now fast running out – but perhaps there is a slight delay in publishing details of the project due to the election.

What Cheddar Reservoir 2 will look like is open to speculation but based on previous work in 2018 when it was ‘full speed ahead’ for the new reservoif until Ofwat pulled the plug expect something looking like an amoeba in shape south of the current one. That was the graphic visual publised then – smaller in size but deeper than the existing one with more provision for wildlife and recreation. One of the major issues will be its construction as back in the 1930s the original reservoir employed hundreds of workers, a steam powered crane, a railway siding off the existing railway to bring in materials and a mix of diggers and mechanical shovels. Today it will mean thouands of trucks bringing in materials and even the possibility of a temporary road linking the A38 at Lower Weare to the site at Hythe Lane.

I have written about the building of the first reservoir here: https://www.harrymottram.co.uk/publications/strawberry-line-times/features/building-cheddar-reservoir-in-the-1930/

One highly unlikely event is SWW being nationalised and returning to something like the South West Water Authority set up in the 1970s to bring the various water firms under one umbrella organisation. That lasted until 1989 when the utlities were privatised. Some Labour MPs would like to see nationalisation return – and this is a big if – but if Thames Water does go into adminstration next summer – there will be renewed calls for state intervention – since it will be the tax payer who will be paying for the insolvency of Thames Water.

I have written about the problems of Thames Water for ICSM in Bridgwater here: ICSM – Take Control Of Your Finances (icsmcredit.com)

This is from the BBC:

Average proposed bills in 2029-30

Source: Ofwat

Labour has pledged a crackdown on the water industry, promising consumers higher compensation for sewage failures and the power to hold executives to account.

It plans to introduce new measures to ensure that money earmarked for investment and improvements cannot be diverted to pay salaries or dividends.

Axbridge News is edited by Harry Mottram and is published for the interest of himself and fellow residents.

Harry is a freelance journalist. Follow him on Facebook, LinkedIn, Twitter, Instagram, YouTube etc

Email:harryfmottram@gmail.com
Website:www.harrymottram.co.uk