Watchdog pushes for lower water bills

Thursday, 23 July 2009 09:12

Ofwat is pushing water companies to cut bills between 2010 and 2015 by £14.

The water industry regulator is entering a tug of war with the utility providers over bills – with the industry demanding average bills of £375 and Ofwat wanting a £330.

However, the size of the average bill varies substantially across the UK.

In different areas, water bills could be cut by as much as 14 per cent or increase by nine per cent before inflation over the five years.

The highest bill is set for the south-west at £517, while Severn Trent’s bills come in lowest at £318.

Ofwat chief executive Regina Finn said: “People can shop around for the best deal on many things, but not water. That’s why we’ve challenged the companies’ plans rigorously to ensure that customers get the best value for money.

“We understand times are hard and we have listened to what customers have told us. They want safe, reliable water supply at a reasonable cost.”

Thames Water, one of the largest water firms, hit out at the regulator saying its plans were based on “sound evidence and, most importantly, what customers say they want”.

David Owens, chief executive for Thames Water, said: “We’re not prepared to cut corners on essential work – but we’re not ‘gold-plating’ either.”

He added Ofwat’s plans would mean leakage reduction plans would not be met.

Thames Water is proposing a £5.5billion of essential investment plan, but the watchdog is cutting this to £4.6 billion in the draft plans, the firm claimed.

Mr Owens said: “Decades of under-investment mean our bills – among the UK’s cheapest – are unsustainably low.

“Although bills must rise to fund much-needed upgrades to our crumbling Victorian pipes and sewers, we’re proposing to keep them as low as possible – less than £1-a-day by 2015, which is below the forecast industry average.”

He added the firm was also working on a social tariff to aid those in financial hardship.

The Consumer Council for Water – established to represent consumers and which was involved in negotiations for the first time – welcomed the Ofwat draft plan, but said water bills are still too high for many.

Dame Yve Buckland, chair of the Consumer Council for Water, said: “When we ask ‘are your water bills affordable?’ one in five customers tells us no.

“We are concerned that a reduction in prices still isn’t enough to solve the problem, and we will continue to press government to provide better support for these people.”

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