Wessex Water has submitted a record £3.5 billion AMP8 business plan setting out its investment proposals for 2025-2030.

The water company is proposing to more than double the current five-year AMP7 spend of around £1.5 billion – subject to regulatory approval for its AMP8 business plan.

The investment in water and sewerage services, improving the health of rivers and reducing pollution will also see the creation of more than 2,000 new jobs and the biggest ever support package for customers to ensure bills are affordable for all.

As well as providing security of water supply, ensuring the water system can cope with the growing demands from population growth and climate change, there will be a huge focus on improving river health, which will include:

• Reducing discharges from storm overflows through a programme of work that will include nature-boosting wetland creation – a record £400 million being invested.
• Stripping out nutrients from wastewater discharges in response to nutrient neutrality rules, unlocking new housebuilding across many parts of the region without damaging the water environment – a £900 million commitment.
• Safeguarding rivers and groundwater sources through demand and leakage reduction work so 16% less water is abstracted from the environment, while meeting everyone’s needs for the long-term.

Introducing the plan, ChairmanTan Sri (Sir) Francis Yeoh KBE commented:

“We face a cost of living crisis; a climate and nature crisis; and a crisis of confidence in the water sector. For all these reasons, public and political scrutiny is rightly at an all time high. At Wessex Water, we have recognised that we did not act quickly enough on storm discharges, we will now step up, inspire confidence and start to rebuild trust.

“But there are no easy choices or quick fixes. Each and every challenge is both urgent and long-term in nature. Often the various challenges also pull in different directions. For instance, rapidly accelerating investment in improving river health would support environmental recovery and trust, but would increase costs for customers and, where nature-based solutions are not possible, produce more carbon.

“In short, PR24 looks set to be the most difficult price review so far.”

While the exact amount bills need to rise will be determined by Ofwat, Wessex Water said it could average around an extra £13 a month in real terms by 2030. The utility expects average bills to increase by £150 in real terms over the next five years, after a decade of rises being held below inflation.

Although bills will still be lower in real terms than they were 15 years ago, the water company acknowledged that “any increase will be unwelcome” and particularly difficult for customers struggling to make ends meet.

Chief Executive Colin Skellett said:

“This plan is all about striking the best possible balance for people and the planet at a time of crisis.

“For customers, we expect by 2030 average bills will have risen by £13 a month in real terms, after a decade of rises being held below inflation. We don’t underestimate how unwelcome this will be for many.

“We have minimised the increase by pursuing alternative and innovative approaches wherever possible, and we commit to protecting those who will struggle to pay. Our business plan contains the best balance we have been able to strike between increasing investment and keeping prices affordable.”

The investment in infrastructure will be shared between customers and Wessex Water’s long-term owner YTL, which is committed to ensuring the company remains financially resilient.

The business plan breaks the key drivers behind the £3.5 billion AMP8 spend as follows:

• Nutrient reduction £900 million
• Storm overflow improvement £400 million
• Maintaining asset resilience £1.1 billion
• Bioresources and IED £180 million
• WINEP improvements and investigations £150 million
• Smart metering, leakage and PPC reduction £120 million
• Pollution and sewer flooding £120 million
• Wastewater treatment capacity £100 million
• Continuous river quality monitoring £70 million
• New development £70 million
• Other £290 million

             Total £3.5 billion

Key areas of activity will include:

• upgrading ten treatment cenres to increase resilience and safeguard water quality
• rapid rollout of smart meters to 40% of household and business customers by 2030.
• replacing 6,000 lead pipes in the water network and providing grants to help customers to remove lead in the pipes that connect to their properties.
• doubling the rate of mains replacement
• developing options for longer term resilience, including a second reservoir at Cheddar, turning a former quarry on the Mendips into a reservoir and transferring highly treated effluent from the Poole water recycling centre to enhance flows in the River Stour.
• doubling the current level of investment to tackle storm overflow discharges to more than £6 million a month, a total of £400 million over the five-year period
• sewer capacity to be increased to meet the needs of new development
• enhanced network monitoring, including installing 12,000 more sensors to detect changes that could lead to a problem
• creating smart systems which link up our treatment and network intelligence, enabling all our assets to work more effectively together
• installing around 500 river water quality monitors at high priority sites by 2030 and a further 1,400 by 2035
• improving the biodiversity of more than 716 hectares, creating around 200 hectares of additional habitat and investigating options for peatland restoration

Colin Skellett added:

“We’ve listened closely to our customers so the plan invests in areas that they care about. It will be challenging for us all, requiring shareholders to provide more investment and customers to pay higher bills.

“We are far from starting from scratch; we’re currently investing £1.5 billion between 2020 and 2025, which includes work well under way on reducing storm overflows, but recognise there’s more to do.”