29/08/2003

'Dismay' over proposed increases to water charges

WaterVoice reacted with dismay yesterday to the announcement by the water industry body Water UK that the expected average water bill of £240 in 2004-05 could rise by £15 on top of inflation, every year for the next five years; a total increase of £75 (or 31%).

Water UK has said that the renewal or repair of water mains and sewers and expenditure on further environmental improvements are the main reasons for the projected increases in bills. However, research undertaken last summer by MORI for WaterVoice, Ofwat, the Environment Agency and other key bodies revealed that only 12% (or 1 in 8) of customers were prepared to pay more than £5 per year for improvements to water and sewerage services and the water environment.

WaterVoice had warned last week that there were "ominous signs about future water bills".

Maurice Terry, WaterVoice Chairman, said: "Customers will be shocked to learn that average water bills could rise by nearly one-third over five years, excluding inflation. For individual companies increases could be lower or higher, up to £175 over five years. Customers will also be surprised because the government, Environment Agency and Drinking Water Inspectorate tell us that river, bathing water and drinking water quality are the highest ever. Unfortunately unpaid water bills are also at their highest level ever."

Today's announcement by Water UK and the publication tomorrow and Monday of the individual water companies' draft business plans are a key stage in the process towards the setting of new price controls by Ofwat in November 2004.

Earlier today, WaterVoice North West "expressed great concern" at United Utilities' proposals for water and sewerage services and water bills for 2005-10.

The company's draft business plan, which has been submitted to Ofwat, suggests that the average household bill will rise from £243 to £416 over the five-year period.

United Utilities proposals show that over three-quarters of the 70% increase in bills has been earmarked to fund improvements.

Mr Terry added: "We are not convinced that United Utilities have struck the right balance between what needs to be done, what would be nice to do, and what customers can afford. We will be doing everything within our power to ensure customers get value for money from the price review, and that increases in water bills are kept to an acceptable level. We will be examining details of the company's plan and making challenges where this is appropriate."

(gmcg)

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