07/11/2003

Water price rise proposals 'unacceptable for customers'

WaterVoice has today described companies' proposals for billing as "unacceptable to customers in their current form", and called on water companies, regulators and the government to "think about customers' priorities" in terms of value for money.

In a briefing note responding to Ofwat's recent Overview of water companies' draft business plans, the agency questioned the proposed size of water bill increases before projects for drinking water quality, environmental improvements and asset maintenance are given the go-ahead.

Ofwat's paper had confirmed that water companies were seeking an average increase of £72 above inflation over the period 2005 to 2010 (a real-terms increase of 31%), taking the average household bill from £234 in 2004-05 to £306 in 2009-10.

Maurice Terry, WaterVoice Chairman, highlighted the companies' ambitious plans to implement the environmental programme at a cost of £4.6 billion over five years, and plans for improving (already high) drinking water quality, weighing in at £2.3 billion.

Mr Terry said: "Following this week's DEFRA announcement that bathing water quality is at an all-time high, and with similar record high standards enjoyed in river and drinking water quality, customers will find it difficult to accept that they have to pay so much more through their water bills.

"Our analysis also suggests that many draft business plans are likely to understate the true extent of price rises, because of a range of uncertainties including designations under European Directives – some of them representing questionable value for money - and new accounting standards."

WaterVoice has already questioned the scale and pace of the proposed environmental programme, but is also asking why proposed drinking water plans for nitrate and pesticide removal from water sources should be met from customers' bills in preference to effective application of the 'polluter pays' principle. WaterVoice also "remains to be convinced" that the proposed lead pipe replacement programme represents good value for customers.

WaterVoice committees will meet in public in their regions later this month before submitting their formal response to Ofwat. All customers are welcome to attend.

(gmcg)

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