Cost of water to be cut

Customers in England and Wales will see their water bills decrease slightly over the next five years, the water service regulator Ofwat has revealed.

Publishing its final decision on how much water and sewerage companies can charge customers in the next five years, Ofwat said the average water bill will fall by £3 to £340 by 2015.

Typical bills will also remain flat between 2010 and 2015. 

Following months of negotiations with water and sewerage companies, the regulator is happy with what it has achieved. "Customers have told us they want us to keep water and sewerage charges flat while maintaining a safe reliable supply of water. That’s what we’ve delivered," says Regina Finn, chief executive of Ofwat.

Ofwat had originally wished to cut bills further, by an average amount of £14, down to £330. However, Finn says Owfat is pleased it managed to secure a higher cut than the water industry wanted.

"People can shop around for the best deal on many things, but not water. Our job is to do this for them."

On top of the price cut, in the next five years, the largest ever investment in the water and sewerage sector will be undertaken, thanks to Ofwat’s negotiations. More than £22 billion will be poured into improving facilities to ensure clean and reliable supplies of drinking water.

Top of the priorities list is to better protect customers’ water supplies from extreme events such as flooding - an issue identified by many customers as a chief concern. Given the flooding horrors experienced in areas like Cumbria in recent weeks, improvements to prevent disruption to water supplies will come as a welcome relief.

Saving water and increasing efficiency has also been identified as an important development between now and 2015. More than 100 billion litres per year could be saved by reducing leakage and increasing metering in homes.

"It doesn’t stop here," Finn says, "We will now make sure the companies deliver on their promises. If they don’t we’ll take action."

Scottish water companies have also been told they cannot raise bills for a year from April 2010. Their regulator - the Water Industry Commission for Scotland - said it was likely to extend the price freeze for another year.

In Northern Ireland, price limits will be published in December, but the Northern Ireland Utility Regulator proposed in September that household bills should come down by £22 over the next three years.

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