WATER firms have been repeatedly warned that their supplies could run out, an investigation revealed today as the industry confirmed bills across England and Wales will rise by an average of 5.4 per cent from April.

The increase — which equates to £33 a year for the average household — is two percentage points above inflation but comes as companies prepare to invest £20 billion over 2026-27 to secure water supplies and end sewage entering rivers and seas, Water UK said.

As severe flooding from Storm Chandra saw dozens of homes evacuated in Dorset today, documents uncovered by Watershed Investigations revealed regulators raised supply risk concerns with 11 water firms last year.

South East Water, which has blamed recent outages on poor weather, was sent warnings for four years running about the pressure on its system by Ofwat, the Environment Agency and the Environment Department, it emerged.

In the most recent letter sent in November last year, they said it had “shown significant resilience concerns during dry weather with supplies being restricted due to high demand.”

Ten other companies have also been told to address risks to shortages, most several times, with regulators sending South West Water, Southern Water, South Staffordshire Water and Portsmouth Water warnings over six consecutive years.

River Action chief executive James Wallace said: “This is yet more evidence that the UK is sleepwalking towards running out of water.

“It sounds absurd in a rainy country, but decades of under-investment and a profit-first model have left our water system — our lifeblood — dangerously fragile.

“Three million litres of drinking water are lost every day through leaking pipes and not a single new major reservoir has been built since privatisation in the late 1980s.

“The public has paid through rising bills — now water companies must invest to prevent taps running dry and serious damage to the economy, food security, industry and our health.”

The other companies were Thames Water, Anglian Water, Affinity Water, Cambridge Water, Essex and Suffolk Water and Albion Water.

Water UK called for a new regulator to ensure flawed planning assumptions around water supply forecasts are corrected.

Last week, ministers outlined powers planned for a new watchdog as part of a regulatory shake-up aimed at deflecting demands for nationalisation, which have overwhelming public support.