Water bills are expected to rise, according to the regulator

Water companies are likely to pay to increase bills in 2025 to cover the cost of improving services, the chief of the omissions regulator said.

It comes after the largest service providers came under fire for their records of sewage spills and plugging leaks.

Many are also heavily indebted, with Thames Water currently in danger of being taken over by the government.

David Black, the head of Ofwat, denied that it had failed to regulate the industry well.

But he admitted there were “hard lessons to be learned” and that he was “outraged” by the water industry’s excessive CEO pay.

Despite the criticism, Black told BBC Radio 4’s Today show that customer bills were likely to rise as companies try to improve.

“We expect companies to request billing increases in the next rate review to fund large investment programs, and these programs will improve the environment.”

Former environment secretary George Eustice said last Wednesday that bills are set to rise again in 2025 by about £42 per household on average over a “long time frame”.

It followed a report in The Times that increases could be as high as 40%, a figure Mr Eustice denied, saying it would be “much less”.

Water UK, which represents suppliers, told the BBC any increases would be within the regulator’s purview.

Last week it emerged that Thames Water was struggling to raise the cash it needed to service its huge £14bn debt pile.

The company, which supplies a quarter of the UK’s population, has faced criticism over sewer drains and leaks and is under pressure to improve its services.

If the Times can’t raise the money, it can be put into a “special management regime” – where it will be temporarily re-nationalized – although Mr Black said this remains a “dead end option” and “we’re still a long way from that”.

Black said Thames had until the “early part of next year” to find the funds and currently had cash reserves of £4.2 billion in the bank.

Asked specifically if customers should pick up the tab if an investment isn’t imminent, he replied, “No.”

Last week, Health Secretary Neil O’Brien also sought to allay concerns about the potential impact on customers, but the Influential Businesses Committee warned taxpayers could be hit hard.

Labor MP Darren Jones told the BBC that if the government had to take over Thames Water, “taxpayers would be exposed to the debt and operating costs of a very large business”.

Offutt says she is still waiting to see how Thames Water plans to fix its finances and that the company needs to raise “significant” sums. Talks are under way to try to secure additional financing.

The regulator has faced allegations that it failed to properly oversee the industry.

But Black said the companies were responsible for their financial structures, not Offat, which was tasked with protecting customers.

Thames Water was last week fined £3.3m over a “reckless” incident in which “millions of liters” of undiluted sewage was pumped into rivers near Gatwick Airport in 2017.