Proposed average
bill to go down by £14 by 2015
Investment of almost £21
billion over five years
Ofwat today published draft proposals for the prices water and
sewerage companies can charge their customers between 2010 – 15.
Its proposals will see household bills remaining broadly stable
until 2015.
Every five years Ofwat sets limits on the prices water and
sewerage companies in England and Wales can charge their
customers. Its draft proposals follow the submission of water
companies' final business plans in April.
The regulator's scrutiny of companies' business
plans will see the average household water and sewerage bill
reduced by around four per cent or £14 to £330 by 2015.1 This is
before inflation is considered.
Companies will still be able to invest extensively. Almost £21
billion will be pumped into helping maintain and improve services
to consumers. The proposals will build on the progress made over
the last 20 years since privatisation, allowing companies to carry
on delivering a safe, reliable supply.
Flooding in 2007 highlighted the risk extreme weather conditions
pose to water supplies. The proposed investment will see this risk
reduced for around ten million people.
More than £4 billion will be invested in maintaining and
improving drinking water quality, as well as protecting the
environment. This will help deliver cleaner wetlands, rivers and beaches.
Regina Finn, Ofwat Chief Executive Officer said:
"We understand times are hard and we have listened to
what customers have told us. They want a safe, reliable water
supply at a reasonable cost.
"People can shop around for the best deal on many
things, but not water. That's why we've
challenged the companies' plans rigorously to ensure that
customers get the best value for money from the £21 billion of investment.
"Our proposals allow the companies to build on the
successes of the past, keep bills broadly stable and create a
better environment.
"Our decisions allow efficient, well run companies to
invest in the right place at the right time for the right price."
Companies, customers and interested parties now have the
opportunity to present their views on Ofwat's proposals.
Final limits on the prices companies can charge will be published
in November. New bills will then come into effect in April 2010.
Ofwat's proposals will allow companies to ensure
customers continue to see improvements and receive a safe,
reliable supply of drinking water. Benefits would include:
* Over 10,000km of water mains being improved or replaced – more
than the equivalent of London to Cape Town.
* Extreme events such as flooding can severely disrupt water
supplies. Around 10 million people would benefit from investment
to guard against them being without water.
* A reduction to national leakage levels of around 70 million
litres a day by 2015. This extra saving would be enough to fill
the auditorium of the Royal Albert Hall around 300 times every year.
* Addressing sewer flooding problems for more than 5,600 properties.
* Improve 130 water treatment works and 520 sewage treatment
works to maintain and improve the environment and drinking water quality.
* Maintain or improve more than 2,700km of rivers to meet EU
environmental standards.
* Improve water quality in more than 55 wetlands and bathing waters.
* Investment in renewable energy sources to reduce carbon
emissions and cut operational costs by around £8.5 million a year.
The electricity generated would be equivalent to the amount
required for around 90,000 homes.
Ms Finn said:
"We've reduced bills, whilst allowing
extensive investment of almost £21 billion. Everyone will see real
benefits as a result of our proposals.
"Not only will customers continue to receive a safe,
reliable supply of water, but we have worked closely with our
partners to ensure our environment gets a better deal too.
"Events such as flooding can seriously affect water
supplies. We need to help guard against that. Investment over the
next five years will help keep the taps running by reducing the
risk of supply interruptions for around 10 million people.
"But it doesn't stop here. Once we finalise
prices in November, we will continue to hold companies to account
by making sure they deliver on their investment promises. Should
they fail to do so we will take action."
Ofwat's challenge sees average bills around 12 per cent
or £45 lower by 2015, compared to what companies wanted.
To view tables visit
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Tables will be avaiable on the right-hand side of the page
under related items
Notes to Editors
1. The average household bill is, by definition, an average
across all customers. Individual customers' bills may be
more or less than the average because of their particular
characteristics, for example, whether they have a water meter.
Changes to customers' bills will vary according to which
company supplies them. Some customers receive their water services
from one company and receive their sewerage services from another.
2. The Water Services Regulation Authority (Ofwat) is the
economic regulator of water and sewerage companies in England and
Wales. It exercises its powers in a way that it judges will
protect the interests of consumers, promote value and safeguard
future water and sewerage services by allowing efficient companies
to carry out their functions properly, and finance them.
3. For more details about the price review process and
Ofwat's draft decisions, please visit www.ofwat.gov.uk .
4. Ofwat's draft proposals will allow companies to build
on the successes of the last 20 years. Since privatisation, £80
billion of investment across England and Wales has seen
significant improvements in service delivered. These include:
* Leakage down by around a third since its peak in the mid-1990s.
* Around 339,000 fewer customers at risk of lower pressure –
a reduction of 99% since 1989.
* The proportion of properties at highest risk of sewer
flooding has reduced by more than 75% in the last 10 years – more
than 20,000 properties.
* Drinking water quality in England and Wales is comparable
with the best in Europe. In 2008 99.96% of drinking water met
quality standards.
* In 1990, only around 78% of England and Wales's
bathing waters met the minimum standards. In 2008 this figure had
risen to 97%.
5. Proposed bill changes have been rounded to the nearest whole £
(for example, a change of £3.82, will be written as an increase of
£4). Some % totals may therefore not add up due to rounding
6. Media enquiries to Ofwat Press Office on:
Benedict Fisher on 0121 625 1442 / benedict.fisher@ofwat.gsi.gov.uk
Or
0121 625 3662/ 1416 / 1496 / pressofficeteam@ofwat.gsi.gov.uk
Contacts:
NDS Enquiries
ndsenquiries@coi.gsi.gov.uk