Page last updated at 09:19 GMT, Thursday, 26 November 2009

Water bills in England and Wales to be cut

Regina Finn of Ofwat: ''Customers are reaping the benefits of what they have paid in the past''

Average water bills in England and Wales will be reduced slightly over the next five years, regulator Ofwat has announced.

It has ruled that typical bills will fall by £3 to £340 by 2015, before the impact of inflation is considered.

Publishing its final decisions on what firms can charge from 2010 to 2015, Ofwat said bills would be 10% lower than the level companies had asked for.

The water companies said funding greater investment would be difficult.

"It is quite possible that companies will have to adjust or stop their leakage programmes," said Pamela Taylor, the chief executive of the industry body Water UK.

"They will need to make sure they can fulfil their legal obligations. They've got challenges ahead such as climate change, with increased drought and flooding, [and] a growing population with more homes."

Protecting consumers

Ofwat had initially wanted to cut bills by a larger margin of £14.

It had suggested cutting the average bill to about £330 in its draft proposals, released in July.

Ofwat chief executive Regina Finn said the regulator had listened to its stakeholders and to customers since its draft was published.

"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.

"We will now make sure the companies deliver on their promises. If they don't, we'll take action to protect customers.

"[Customers] have told us that certainly what they want is a safe, secure water supply, but they wanted some more things. [For instance] they wanted more money spent on protecting homes from sewer flooding," she said.

Wide variation

The official watchdog, the Consumer Council for Water, broadly supported Ofwat's decision.

But it pointed out that bills would vary a lot between individual suppliers.

"The prices announced vary from company to company, so depending on where they live, customers will face a range of price changes from a reduction in average annual bills by as much as 7%, to an increase in bills of 13% before inflation," it said.

"Customers of companies such as Essex and Suffolk Water (13%), Bristol Water (7%), Southern Water (5%) and Thames Water (3%) will all see rises in average bills.

"South West Water customers without a meter could see a 29% rise in bills," the Consumer Council warned.

More investment

Ofwat said one part of its price deal with the water firms was they must invest more than £22bn during the five years.

This figure - which is for the total amount across the industry - amounts to an investment of more than £935 per household in England and Wales.

The £22bn of earmarked investment includes £12.9bn to maintain and improve infrastructure, such as pipes and treatment works, and £4.6bn on improving drinking water and the environment.

Scottish water companies have been told they cannot raise their bills for a year from April 2010.

The regulator - the Water Industry Commission for Scotland - said it was likely to extend the price freeze for another year.

Prices cannot rise higher than 5% below inflation over the next five years. Scottish Water has also been told to reduce leaks by a third.

Prices limits for Northern Ireland Water, the government owned water and sewerage monopoly will be published in December.

The Northern Ireland Utility Regulator proposed in September that household bills should come down by £22 over the three years between April 2010 and April 2013.

EXPECTED WATER BILL CHANGES

Water and sewerage companies

Company Avge bill 2009-10 Avge bill 2014-15 % change excluding inflation
Anglian Water £389 £362 -7%
Dwr Cymru/ Welsh Water £404 £374 -7%
Northumbrian £299 £313 5%
Severn Trent £305 £292 -4%
South West £489 £483 -1%
Southern £373 £393 5%
Thames £303 £313 3%
United Utilities £374 £364 -3%
Wessex £412 £424 3%
Yorkshire £331 £332 0%

Water-only companies

Company Avge bill 2009-10 Avge bill 2014-15 % change excluding inflation
Bournemouth & W Hants £133 £134 1%
Bristol £157 £168 7%
Cambridge £114 £116 1%
Cholderton £188 £188 0%
Dee Valley £128 £130 2%
Essex & Suffolk £169 £190 13%
Veolia South East £185 £181 -2%
Portsmouth £93 £87 -7%
South East £169 £174 3%
South Staffs £124 £126 2%
Sutton & E Surrey £166 £167 1%
Veolia East £169 £160 -6%
Veolia Central £156 £146 -6%

Weighted average of water and sewerage bills
All figures exclude inflation



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SEE ALSO
One-year freeze for water bills
26 Nov 09 |  Scotland
More seek help with water bills
28 Sep 09 |  Business
Ofwat calls for lower water bills
23 Jul 09 |  Business
Regulator wants water charge cap
30 Jun 09 |  Scotland
Severn Trent annual profits fall
29 May 09 |  Business
Water companies ask for more cash
07 Apr 09 |  Business

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