Water and sewerage bills to increase

Posted: Monday 11th February 2013

The average household water and sewerage bill in England and Wales is forecast to increase by 3.5%, or about £13. This takes into account a rate of inflation of 3%1, and will mean an average bill of £388 in 2013/14.

In 2009 Ofwat made its decision on how much water and sewerage companies could charge customers between 2010 –15. The regulator's challenge of companies' proposals means that across England and Wales average bills have remained broadly in line with inflation. And bills are ten per cent lower than what companies asked for.

This is before inflation is factored in. The rate of inflation is added to bills on a year-by-year basis. Since 2009/10, the average bill has risen slightly below (by 0.7%) the rate of inflation.

Regina Finn, Ofwat Chief Executive Officer said:

“Customers can’t choose their supplier. It’s our job to make sure they are protected. Back in 2009, companies wanted bills rises of 10 per cent above inflation. That didn’t chime with what customers told us they wanted, so we said they could only increase bills in-line with inflation.

“We understand that there is huge pressure on household incomes, and any rise is unwelcome. Inflation is driving these increases.

“These rises will help pay for investment of around £1000 for every household in England and Wales. This will deliver real benefits - from continuing to improve the reliability of supplies to dealing with the misery of sewer flooding for thousands of customers.

“We will make sure customers get value for money, and if companies fall short in delivering their investment promises, we will take action. In the past seven years, we have made companies pay out around £550 million where they have underperformed.”

The bill changes for this year will come into effect on 1 April 2013 and apply until 31 March 2014. The impact of the new charges will vary for individual household customers depending on the company that supplies them and whether or not they have a water meter.

Customers’ bills are helping pay for an investment programme worth around £25 billion between 2010 – 15. This will allow companies to ensure customers continue to see improvements and receive a safe, reliable supply of drinking water. Key benefits of the investment will include:

Safe, reliable supplies

Protecting customers

Environment

Saving water and using energy wisely

Last week Ofwat announced proposals to change the way it regulates the water and sewerage sectors to drive more efficient, customer-focused companies, and ensure more sustainable water use. The regulator also welcomed a report on the Draft Water Bill, which has identified potential benefits of £2 billion by changing the way water is managed.

Commenting on the need for change, Regina Finn said:

“There are longer term challenges if we are to continue to keep bills down. Unpredictable rainfall, and population growth in areas where water is already stretched, means we need to get better at managing and sharing our water. If we don’t, customers will lose out.

“Our proposed changes, combined with recommendations in the Draft Water Bill, mean there is a total of £3 billion worth of benefit on the table for customers if we make the right changes. We cannot afford to stand still, if our water supplies are to remain both affordable and sustainable in the decades to come.”




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