Campaigners have accused the water regulator Ofwat of unlawfully forcing customers to foot the bill for "decades of neglect" by the water industry. River Action has launched a legal challenge against the watchdog on the day that customers' bills rise by an average of £123 a year.

Emma Dearnerly, head of legal and policy at River Action said: “We need a root and branch reform of the failing water sector and its regulators to prevent water companies from prioritising profits over customers and river health. Our legal case highlights systemic issues with Ofwat's approach relying on modeled data instead of reality. This is simply not good enough. We need to have full confidence that Ofwat will meet its promise that customers will not pay twice after decades of mismanagement.

"This is why we’re demanding immediate reform to ensure regulators do their job and water companies are not let off the hook. The cost of fixing our crumbling water infrastructure should fall on these companies and their investors—not the British public.”

River Action warned that Ofwat’s decision to allow bill hikes in its latest price review means customers could be forced to pay twice for failing infrastructure: once through previous water bills, and again through upcoming charges.

Water companies spilled raw sewage for a record time of 3.61million hours into sea and rivers in England in 2024, according to data from the Environment Agency.

Ricardo Gama, Leigh Day solicitor, said: “Ofwat has provided repeated assurances that it won’t let price rises be spent on fixing historic issues, and that customers won’t be expected to pay twice.

"But in documents seen by River Action, it appears that Ofwat hasn’t sufficiently investigated whether the extra funding that United Utilities has been allocated will actually be used for that purpose. River Action believes that this is indicative of a wider lack of due diligence undertaken by Ofwat over many years, which has resulted in money not being spent on maintaining infrastructure.

 “In launching its legal challenge, River Action is calling for Ofwat to take regulatory action to ensure that water companies do not pass the cost of their own failure onto customers.”

An Ofwat spokesman said: "We reject River Action's claims. The PR24 process methodically 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. We will respond to their claim in due course."