Eagle Wades Into Water Bills in First-Ever Government Price Review Grab

Angela Eagle has told water suppliers in England and Wales that ministers are stepping into the price-setting process — something no UK government has done before. The environment secretary has written to regulators and water company chief executives to set out what she expects from the next review, run by the regulator Ofwat. That process, which decides how much customers can be charged to fund investment and running costs, isn't due to wrap up until 2029. Eagle isn't demanding bill cuts outright, but she wants payers to get far better value for their money.

In the letter, she spells out her priorities: investment in new technology that saves money, earlier action on leaks and sewage overflows, and real decision-making power handed to local communities and leaders. Affordable bills come first, she says, describing affordability as a laser focus on value for money. The letter also warns bosses that this won't be business as usual — calling it the beginning of a long-term transition to a different model for the water sector. The public, she adds, wants clean rivers, reliable service and confidence the system works in their interests.

Defra sources say the intervention is the opening move in a series of announcements on water over the coming months, and describe the industry as one of the clearest symbols of public frustration with Britain's infrastructure. According to the Guardian, those sources said a 10-year plan from Andy Burnham, due after next week's budget, would hand the government tougher powers to lower bills and steer local investment. One source said Eagle will take a much more bullish approach to telling companies and regulators what's expected, adding that ownership structures are among the areas where ministers could go further than before. Sources close to Eagle, meanwhile, say action is needed now because companies are already making decisions ahead of the next review.

All of this lands as the government weighs more radical options for Thames Water, which is running out of cash and has asked creditors for an extra £2.4bn. The Guardian reported earlier this week that Burnham told officials to consider options previously deemed unfeasible — even if that means spending taxpayer money, heading to court, or both. Burnham has previously said he would nationalise the company, but has struggled to find a route that avoids billions in costs, a lengthy legal fight, or both.

The last review, settled in 2024, is the backdrop to the anger. Ofwat signed off a £104bn modernisation programme, funded largely through annual increases that will push average bills up 36% over the second half of the decade. Southern Water customers got the steepest hit: 53% more by 2030, averaging £642 a year. Over the summer, several major suppliers asked to charge billions more to cover capital costs and debt, drawing fury from campaigners and politicians. The prime minister warned bill payers must not be treated as a blank cheque or a bottomless source of funding for other people's failures.