The lucrative Water business- increasing your bill by more than inflation

31 January 2012

While the Government made a cull of extraneous quangos when it first took office, one group of acronyms we are all pleased to see hanging around are the regulatory bodies that make sure the once-public-owned utility services (for example) are giving us, the comsumer, a good deal for our money. In keeping with this remit, Ofwat, the water industry regulator, has today announced that charges will go up by an average of 5.7 per cent in England and Wales, yes, that’s even more than inflation, from April.

The actual increase varies from region to region, but country-wide bills for water and sewerage services are set to rise to £376 in the next financial year, an increase of about £20 per household. The increases take into account multi-billion upgrade programmes for pipes and treatment works.


We have handily reproduced Ofwat’s figures so you can see how much your bill is likely to increase by. Southern Water will offers the largest combined water and sewerage bill rise, at 8.2 per cent but Dŵr Cymru in Wales is putting up combined bills by the lowest amount, just 3.8 per cent, or £16.

For water only providers, topping the chart is Bristol where bills are set to rise 8.8 per cent or £15 to £181 and bottoming out is Veolia Southeast customers with a 3.3 per cent rise –up £6 to £188.

Ofwat mastered the art of the understatement by saying that the price hikes would be “unwelcome” in tough economic times but insisted customers would get “value for money”.

Regina Finn, chief executive of Ofwat, said: “We understand that any bill rise is unwelcome, particularly in tough economic times. Inflation feeds through into water bills, and this is driving these rises.”

“We will make sure customers get value for money. Companies are investing £22 billion by 2015 – more than £935 for every property in England and Wales,” she finished.


However, Ofwat also produces an annual report in October every year, and for the past two years there have been six water companies who failed to meet their leakage targets. In 2011, just three months ago, these companies were Anglian, Dŵr Cymru, Northumbrian - North East operating area, Severn Trent, Southern and Yorkshire.

Southern Water missed its target by the widest margin at 16%, followed by Yorkshire Water at 9%, Anglian Water at 8%, Northumbrian Water - North East and Dŵr Cymru both with 5% and Severn Trent at 3%. Southern Water, Yorkshire Water and Northumbrian Water - North East all missed their targets in 2009/10 as well.

So despite consistently performing badly, not meeting targets and wasting resources the companies are still permitted to put their prices up? Sounds more like a bank than a water company. Southern Water in particular, has been “on report” for two years and still comes in with the biggest combined rise? Royal Bank of Scotland anyone?

When announcing these latest huge price rises, Ofwat told the BBC that the differences in regional price hikes occurred because different companies had ongoing capital investments that needed different levels of funding, such as new large housing estates, or coastal protection, as in the case of Southern. We can only wonder whether the cost of fixing leakage, if the water companies even attempt it, will come out of the water companies’ profits, or whether the cost has been miraculously included in the new pricing structure. After all, we must protect the shareholders.

But of course this won’t be the case. I have every confidence that the delinquent water companies will spend millions fixing leaks and that their bottom line profit will show the huge hit. After all, the very same Ofwat chief executive Regina Finn said in October: "Where we have concerns about companies' performance, we have made sure there are action plans in place to put the problem right, at no extra cost to customers.”

Good job she isn’t a lying politician then.

TOPICS:   Economy   Utilities


  • Mike H.
    So? People have plenty of money. I have still not seen anyone 'hard-up' They splash it on iPhones, cars, holidays, electricals, SKY, as soon as it comes to paying bills they start complaining their tits off. Maybe you will think twice when washing your 3 BMW/Audis parked on your drive. Twat.
  • Nick T.
    Right, that does it -- I'm changing my water provid.. Oh.
  • The B.
    Tsk, Sutton and East Surrey Water, must try harder, you only came second in the price rises and to people with 6 fingers too, shocking.
  • considerablyricherthanyouandyouknowit
    Mike you know I sold the audi for the Aston when the special price of £78,000 was posted on HUKD. I know it's you with the curtains twitching
  • itvplayer
    @Mike Hock, I take your point, but Downton Abbey isn't on BBC...err..or something.
  • Idi A.
    @ Mike Hock So should we only exist to pay bills then?
  • Dick
    Oftwat do a crap job of investigating our local prostitutes. They are fucking mingers.

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