Ofwat blocks Thames Water's 'unjustified' £29 supersewer surcharge

A watchdog has blocked Thames Water’s “unjustified” bid to add a £29 surcharge to household bills next year.

The decision by Ofwat was welcomed by consumer groups and led to calls for similar action by other utility regulators.

Thames Water said the one-off surcharge was needed to help cover the rising cost of London’s £4 billion supersewer and other “unforeseen” burdens, such as increased levels of unpaid bills. It would have added eight per cent to bills, taking the average to nearly £400.

However, Ofwat said the company had overestimated the extra costs. Chief regulation officer Sonia Brown said: “We said we would challenge Thames Water’s request. We have looked at the details and do not believe the current evidence justifies an increase in bills.” The decision is subject to further consultation.

Sir Tony Redmond, London and South-East chairman of the Consumer Council for Water, said: “Other water companies have absorbed many of the same costs Thames says it is facing.”

Shadow London minister Sadiq Khan said: “We now also need urgent action to bring down the cost of housing, transport and energy bills.”

A Thames Water spokesman said: “We will review Ofwat’s draft proposals, and submit our response in due course.” The company already has the all-clear to raise its bills by 1.4  per cent above inflation from next year.