On Thursday 19 January, the Water Services Regulation Authority (Ofwat), revealed details of a £104bn investment plan in a bid to improve services offered by water companies.
To fund the scheme, which Ofwat said was the “biggest” project for decades, businesses will see water bills increase by 42% before inflation between 2025 and 2030.
A British Beer & Pub Association (BBPA) spokesperson told The Morning Advertiser (The MA): “This is a staggering rise for a sector which is wrestling with a raft of punishing business costs and tax rates.
“Brewers and pubs pour billions into the economy and Treasury and support more than a million jobs but, unless there is meaningful reform for business rates, the industry will struggle to remain a stalwart of the UK’s coffers and job market.
Essential investment
“We are calling on Government to swiftly introduce business rates reform so the sector can flourish and help deliver their growth mission.”
The investment will also see consumer water bills rise by £86 (20%) excluding inflation in 2025 and 2026, with smaller percentage increases in each of the next four years.
An Ofwat spokesperson told said: “We have announced a record investment of £104bn for water companies to turn around their environmental record and improve customer service.
“To support this essential investment programme, we estimate that wholesale charges for business customers will on average increase by around 42% before inflation between 2025 and 2030.”
It comes as the latest headline rate of inflation hit 2.6% in the 12 months to November 2024, up from 2.3% in the 12 months to October.
The Bank of England also held interest rates at 4.75% for the second time in a row on Thursday 19 December, leaving many hospitality firms continuing to struggle with Covid loan repayments.
On top of this, energy prices, particularly for gas, have risen sharply over the past few weeks, leaving the market “uncertain” for Q1 2025, according to Nationwide Energy.
Barrier to growth
Ofwat chief executive David Black said: “We recognise it is a difficult time for many, and we are acutely aware of the impact bill increases will have for some customers.
“That is why it is vital companies step up their support for customers who struggle to pay.”
Ofwat added 90% of the funds would go towards meeting new requirements set out by the Environment Agency, Natural Resources Wales and the Drinking Water Inspectorate
In addition, 30 major infrastructure projects will be implemented to build “greater resilience to drought”, the water regulator detailed.
However, UKHospitality (UKH) chief executive Kate Nicholls told The MA this was “another unwelcome cost increase” and would be “another barrier to growth” for the sector.
She added: “We urgently need the Government to address the cost burden facing venues and that starts with rethinking its changes to employer National Insurance Contributions, particularly the lowering of the threshold.”
