Ofwat set to fight off legal action over its price review
The water regulator, Ofwat, is set to face legal action over its price review after an application was green-lit to proceed to the High Court.
Law firm Leigh Day, representing campaign group River Action, is seeking a judicial review over Ofwat’s price review for water companies over the next five years.
Back in December, Ofwat announced household water bills in England and Wales would increase by an average of £31 a year over the next five years, higher than the draft proposals of around £20.
The campaign group has accused Ofwat of failing to establish a mechanism to ensure that any additional investment allocated to water companies will not be used to help them achieve compliance with existing permit conditions.
The funding, granted by Ofwat, is alleged not to address “all relevant information”, such as the 6,000 hours of raw sewage that was pumped into Lake Windermere by United Utilities over 2024.
Figures from the Environment Agency last year showed that there were 477,972 discharges from England’s 14,000 storm overflows in 2023, a 59 per cent increase from the year prior.
River Action’s claim will argue that customers may have to pay twice, once through their previous water bills and again through their upcoming bills, to fix past infrastructure issues.
The group sent its pre-action protocol letter to Ofwat in March, laying out its claim before Leigh Day went on to apply for a judicial review in April.
On Tuesday, Emma Dearnaley, Head of Legal at River Action, confirmed that the High Court had ruled, “We can take our case to court.”
While Leigh Day partner Ricardo Gama alleged: “It’s important that when public bodies tell the public they will do something, they actually do it…. But the documents which Ofwat have sent us appear to show that they haven’t actually checked that the money won’t be used in this way.”
Commenting on the action, an Ofwat spokesperson said: “We reject River Action’s claims. The PR24 process carefully scrutinised business plans to ensure that customers were getting fair value and investment was justified.”
“We agree that customers should not pay twice for companies to regain compliance with environmental permits, and have included appropriate safeguards in our PR24 determinations to ensure this – which we will monitor closely, taking action if required,” they added.