Water bills are set to increase in England and Wales by an average of 5.7 per cent from April, bringing the typical annual cost to £376.
The industry regulator, Ofwat, announced in 2009 that there would be five years of successive rises from 2010 to 2015 to build up a £22 billion war-chest to fund investments in the water supply infrastructure.
Some customers will see larger rises than others as there are wide regional variations in the bill increases. Welsh water customers who receive their bill from Dwr Cymru will see their bills rise by just 3.8 per cent to £427 annually.
However customers with Southern will face an 8.2 per cent increase taking the yearly cost to £416. However, this still dwarfs the largest annual bills which households in the south-west have to pay. Customers with the South-West water company face increases of 4.7 per cent taking their annual water bill to £543.
Ofwat said that the price rises were based on inflation. However, the rises are based on November’s measure of the consumer prices index, when it was at a recent high of 5.2 per cent and a further 0.5 per cent has been added. Inflation has fallen sharply since and is expected to continue to fall towards two per cent this year.
The regional differences in price rises are caused by the separate capital projects that are planned across different regions that require varied levels of funding. For instance the higher than average level of new homes and housing estates being built in the south east mean that Southern customers face higher bill increases.
Regina Finn, Ofwat Chief Executive Officer said: “When we set limits on prices, we listened to customers. They told us they wanted bills kept down, while maintaining safe, reliable water supplies. We challenged companies hard to deliver this. Our decision meant that, before inflation, average bills would remain broadly stable between 2010 -15.
“We understand that any bill rise is unwelcome, particularly in tough economic times. Inflation feeds through into water bills, and this is driving these rises.
“If companies don’t deliver on their investment promises, we will take action.”
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