Regulator plans £50 cuts in water bills

Water regulator Ofwat has announced plans to cut domestic water bills by £50 between 2020 and 2025.

It is also calling for suppliers to invest an additional £6 million a day to improve the service they provide.

A new era

Announcing the news as ‘a major package of investment to signal a new era for what the water sector delivers for customers and the environment’, Ofwat said the £6 million a day is ‘over and above the investment needed to maintain existing assets’.

The plans include:

  • Cutting pollution incidents by more than a third
  • Reducing supply interruptions by almost two-thirds/li>
  • Helping 1.5 million customers who are struggling to pay
  • Cutting leakage to save enough water equivalent to the needs of the combined population of Manchester, Leeds, Leicester and Cardiff/li>

Brighter future

Chief executive Rachel Fletcher said: “The package we are unveiling today signals a brighter future for customers, with better services, a healthier natural environment and lower bills.

“To get there we are calling for extra investment of £6 million each and every day to improve the environment and provide services for a growing population.

At the same time we expect to see customers’ bills cut by an average of £50.

Goals

“These are seriously stretching goals for the sector, but we know they can be achieved.

We have seen three water companies leading the way and we now want the rest to show the ambition and drive to deliver this new era for customers and the environment.”

The level of bill reduction will vary widely across the country with Hafren Dyfrdwy in Wales falling by just £7 while bills in Northumbria will be reduced by £110.

Reducing leaks

Reducing leaks is listed as a priority in the plans with schemes submitted by Severn Trent, United Utilities and South West Water being the only three out of 17 authorities having been approved so far.

While acknowledging the level of leaks is lower than it was in the mid-1990s, Ofwat says progress in tackling them has slowed to a crawl since 2001.

Comment

The companies have been asked to comment on the plans over the Autumn with the final plans being confirmed in December.

The announcement was hailed as ‘good news’ by Tony Smith, chief executive of the Consumer Council for Water, but he also warned: “Not everyone will see their bills fall when you add inflation and customers need to be told how much Ofwat’s financial rewards for companies could hit them in the pocket.

“Only about half of the three million households who struggle to afford their water bills will receive financial assistance under these plans.”