NAO: Expect above-inflation energy and water rises until 2030

Energy and water bills will continue to increase above inflation until 2030.

A report by the National Audit Office (NAO) has discovered large-scale infrastructure projects will have to be funded through the pockets of consumers – over two-thirds of the £310 billion is set to be raised in this manner. 

The body warned hard-pressed Britons could be left facing significant hikes in their tariffs and the poorest ten per cent of households are likely to be the worst affected. 

Despite the fact incomes have remained fairly steady over the past number of years, people have been forced to cope with large increases in the price of energy – whereas the average unit cost of telecoms services has actually fallen over the last decade.

The NAO is concerned about the lack of a "common approach" in the energy sector and wants to see more action when it comes to forecasting bills and measuring affordability.

Amyas Morse, head of the NAO, said: "Government and regulators do not know the overall impact of planned infrastructure on future consumer utility bills, or whether households, especially those on low incomes, will be able to afford to pay them. It seems critical to know 'how much is too much', based on reliable information."

Citizens Advice chief executive Gillian Guy is worried by the current situation, as she revealed since the first price hike was announced by a Big Six provider on October 10th, nearly 84,000 people have gotten in touch with the charity seeking advice.

Ms Guy added there is a "desperate need" for the energy sector to be reformed, as a sustainable plan for the future needs to be drawn up. She remarked many households would not be able to afford a £200 increase in their outgoings.

If people cannot afford to pay their energy bills, they may be forced to rely on credit, which could ultimately lead to them developing debt problems. 

By Amy White