Customers of five water firms are facing higher than expected hikes to bills

Customers of five water firms are facing higher than expected rises to their inflation-busting bills after the companies disputed limits imposed by the industry regulator.

The Competition and Markets Authority (CMA) was called in to review Ofwat's determinations on what Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water could charge customers from 2025-30. The CMA's panel said on Thursday: "The group has provisionally decided to allow 21% - an additional £556m in revenue - of the total £2.7bn the five firms requested.

"This extra funding is expected to result in an average increase of 3% in bills for customers of the disputing companies, which is in addition to the 24% increase for customers of these companies expected as part of Ofwat's original determination." Money latest: The generation that hates their job the most The decision showed that Wessex household and business customers faced the largest increase - on top of the rise agreed by Ofwat - of 5%, leaving their average annual bills at £622. South East and Southern customers will see rises of 4% and 3% respectively while Anglian and Northumbrian's are set to soak up the lowest percentage increase of just 1%.

South East had sought the biggest increase - 18% on top of the 18% hike it had been granted over the five-year period. The companies exercised their right to an appeal after Ofwat released its final determinations on what they could charge at the end of last year.

They essentially argued that they could not meet their regulatory requirements under the controls amid a rush to bolster crucial infrastructure including storm drains, water pipelines and storage capacity. Crisis-hit Thames Water was initially among them but it later withdrew its objection pending the outcome of ongoing efforts to secure its financial future through a change of ownership.

Chair of the CMA's independent panel, Kirstin Baker, said: "We've found that water companies' requests for significant bill increases, on top of those allowed by Ofwat, are largely unjustified. "We understand the real pressure on household budgets and have worked to keep increases to a minimum, while still ensuring there is funding to deliver essential improvements at reasonable cost." Ofwat, which has faced industry criticism in the past for an emphasis on keeping bills low at the expense of investment, is set to be replaced by a new super regulator under plans confirmed in the summer.

It has faced outrage on many fronts, especially over sewage spills, and allowing rewards for failure. Water Minister Emma Hardy said in response to the CMA's decision: "I understand the public's anger over bill rises - that's why I expect every water company to offer proper support to anyone struggling to pay.

"We've made sure that investment cash goes into infrastructure upgrades, not bonuses, and we're creating a tough new regulator to clean up our waterways and restore trust in the system. "We are laser focused on helping ease the cost of living pressure on households: we've frozen fuel duty, raised the minimum wage and pensions and brought down mortgage rates - putting more money in people's pockets.".