Water companies will not be allowed to make customers foot the bill for fixing sewage overflow problems, The Telegraph understands.
Sources in the Government and pricing regulator Ofwat pushed back against the idea that bills would be increased imminently to pay for upgrades after the industry suggested an uplift was "inevitable" following tougher new rules on sewage pollution.
On Tuesday, the Government changed its position on raw sewage dumping, backing an amendment to the Environment Bill that places a "duty" on water companies to curtail the practice, which is a result of decades of underinvestment in the system.
Overflow spills happen when Britain's outdated sewers become full of rainwater and sewage from homes and businesses and this flows into rivers or the sea. It is only supposed to happen in "exceptional" circumstances, but did so 400,000 times last year.
Firms should ‘make best use of funding already available’
Water bills are regulated by Ofwat, with companies setting out five-year plans for approval, including what they plan to charge customers and what they will spend on upgrading their systems. The last plans were approved in 2019, meaning prices are set for the next three years.
New cash can be made available in the middle of the five-year periods if the Government and regulator choose.
But The Telegraph understands that companies will be expected to come up with the initial funds to tackle the storm overflow problem.
David Black, the interim chief executive of Ofwat, said companies should "make best use of the tools and funding already available", with £1.2 billion in the most recent pricing review going specifically to storm overflow measures.
Hugo Tagholm, the chief executive of Surfers Against Sewage, said: "After decades of raking in billions in profit, the water industry must now plough investment into protecting and restoring our amazing rivers and coastline. This landmark Bill must ensure that happens."
On Wednesday, the water industry said the new rules would "struggle to have an impact quickly" unless regulators let them raise more money from customers.
Stuart Colville, the director of strategy at Water UK, said: "Defra need to ensure their regulators are ready to support the schemes and investment needed to achieve this and other environment bill goals. Without that, any new legal duty will struggle to have an impact quickly."