Page last updated at 17:36 GMT, Thursday, 26 November 2009

South West Water in 6 bill cut

Running tap
Ofwat has insisted its decision is a "fair deal" for customers

Water customers in Devon and Cornwall can expect a small cut of about £6 in bills over the next five years, according to the regulator Ofwat.

The reduction is more than the national average of £3, but it is much less than the £30 a consumer group had wanted.

A typical South West Water (SWW) bill will fall to £483 by 2015 - considerably higher than the national average charge of £340.

Local MP Julia Goldsworthy described the cut as "a bit underwhelming".

Neil Gallacher
Neil Gallacher, business and industry correspondent

It's two decades since the water industry was privatised and all through that time, no-one in power has been able to sort out one basic unfairness: The fact that the highest water and sewerage bills in the land fall on the generally low-paid water users of the South West.

The basic problem would only be addressed by some sort of national system that took money from the bill-payers of, say, the Midlands and South East and gave it to bill-payers in this sparsely populated region.

Politicians appear to have concluded so far that there just aren't enough votes in such a move for it to be worth their while.

Since water companies were privatised in 1989, SWW users have paid more because of the region's relatively low population and big coast line.

Ms Goldsworthy, who is the Liberal Democrat MP for Falmouth and Cranborne, said it was "unfair" SWW customers still had to pay more than the rest of the UK.

"Obviously, it's not as much as we'd hoped... but it's better than an increase, which is what we've seen in recent years," she told BBC News.

"This whole issue about 3% of the population paying to maintain one-third of the country's coastline has to be addressed.

"We do have some of the lowest incomes and we have the highest water bills and although today's announcement is a very, very, small step in the right direction, it doesn't change that inherent unfairness."

The Consumer Council for Water has said as many as three out of 10 people in the South West are in "water poverty", with bills costing more than 3% of their income.

SWW, which supplies Devon, Cornwall and parts of Dorset and Somerset, had proposed a 6% increase in bills for a £750m investment programme which would include improvements to its supply and sewage networks.

Ofwat said bills would be 10% lower than the level companies had asked for, although in July it announced it wanted bills to be cut by a larger margin of about £14.

Chief executive Regina Finn said the regulator had "challenged hard" to get the best value for money for water users.

"People can shop around for the best deal on many things, but not water. Our job is to do this for them," said Ms Finn.

It is the water watchdog's final decision on what firms can charge over the next five years.

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