Ofwat to rule on how much firms can charge for water

Ofwat sets the prices that the water firms can charge

Water industry regulator Ofwat will announce later how much water companies in England and Wales can charge their customers over the next five years.

If Ofwat sticks to its preliminary findings announced in July, water utilities will be forced to reduce their bills between 2010 and 2015.

Such a move is likely to see the firms warn it will impact on their services.

Ofwat is also due to rule on how much the companies must invest in their services over the next five years.

A number of firms have already warned they will not be able to offer a decent service if they cannot get any more money.

Thames, the biggest water company, has said it will be unable to reduce leakage at all over the next five years without a price rise.

Another firm, United Utilities, has said it will have to sell off parts of its business in order to make up any shortfall in funding.

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.