Water bills to drop by 5% by end of decade, Ofwat ruled

UK regulator Ofwat ruled that household water bills in England and Wales will decline by 5% on average (excluding inflation) by the end of the decade. This means the average bill will drop to £376 from £396.

Ofwat, also known as the Water Services Regulation Authority, added that customers would see better levels of services over the next five years. Water companies are set to spend over £44 billion (£2,000 per household) from 2015 to 2020.

By the end of this decade, customers should benefit from considerable improvements in areas of service that really matter.

By 2020, over 370 million litres of water per day will be saved by promoting water efficiency and tackling leakage. There will be a 32% reduction in time lost to supply interruptions. Fifty beaches across England and Wales will be cleaner, and 4,700 fewer properties will be flooded by sewer water.

By the end of the decade, the number of customers benefiting from financial support will double to about 1.8 million. Companies will be putting in place measures including social tariffs, which are forecast to help a further one million people.

Jonson Cox, Ofwat

Ofwat is making companies deliver on their promises to customers, Mr. Jonson said.

Chairman of Ofwat, Jonson Cox, said:

“This is an important step in maintaining customers’ trust and confidence in the water sector. We set out to deliver a challenging but fair outcome. We are requiring companies to meet higher service standards and deliver on their promises to customers. We are bringing down bills so customers can expect value for money, while investors can earn a fair return.”

“Companies will need to stretch themselves to deliver much more with the same level of funding as in previous years. We will achieve more resilient infrastructure and better service as a result.”

Drinking water

Ofwat says there will be further improvements to drinking water quality.

Chief Executive of Ofwat, Cathryn Ross, said:

“With bills held down by five per cent and service driven up over the next five years, customers will get more and pay less. Where companies stepped up to do the best they could for their customers we did not need to intervene. But where companies fell short we stepped in to make sure customers get a good deal. Now the hard work begins. Companies will only build trust and confidence with their customers if they deliver. Those who do can look forward to fair returns, while those that don’t will be hit in the pocket and face a tough five years ahead.”

Ofwat says the new charges will come into effect next year. Utility companies have been given two months to decide whether they accept the regulator’s final determination or seek a referral to the CMA (Competition and Markets Authority).

Video – Water firms forced to cut bills

In this Press Association video, Cathryn Ross is interviewed about the latest water bill cuts.