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, the water regulator 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, comments: “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.”
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:
* Improve 140 water treatment works and 550 sewage treatment works to maintain and improve the environment and drinking water quality.
* Over 10,000km of water mains being improved or replaced.
* Investment in cleaning the mains pipe supplies serving more than one million people to help reduce discoloured water.
* Addressing sewer flooding problems for more than 6,300 properties.
* Maintain or improve more than 3,000km of rivers to meet EU environmental standards, and improve water quality in more than 55 wetlands and bathing waters.
* More than 100 schemes to work with farmers and landowners. This will help control pollution and reduce costs by better use of land, preventing pollution of drinking water sources requiring costly treatment.
She adds: “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.
Ofwat recently 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.