Water bills to fall by £50 between 2020 and 2025, Ofwat says
Water industry regulator Ofwat has announced that water bills across England and Wales will fall by an average of £50 between the years 2020 and 2025 after a string of poor performances by water companies.
Only three out of 17 water companies in England and Wales passed Ofwat’s last review, with the results published in January 2019.
Severn Trent Water, United Utilities and South West Water were the successful trio.
Ofwat head Rachel Fletcher told the BBC that water companies will now be made accountable not solely for "reporting against their performance” but will face “tough penalties” if they are below par with targets.
All 17 water firms that were inspected had been planning to bring bills down over the five years between 2020 and 2025, but during this period they will now also have to offer more assistance to vulnerable customers and invest money into cracking down on leakages which were a prevalent issue during spells of cold weather in 2018.
The regulator says that the measures it is taking against water companies will lead to “better services, a healthier natural environment and lower bills”.
There will not be huge reductions in bills across the board, however, with a £7 price fall in the pipeline for Hafren Dyfrdwy's consumers and a £110 reduction at Northumbrian Water when measured up against prices over 2017-18.
Ofwat has charged the firms with the responsibility of reducing water supply cut-offs by roughly two-thirds, reducing the number of customers dealing with low water pressure and bringing down the number of isolated incidents leading to pollution, such as damaged sewage pipes.
The list of new responsibilities is estimated to rack up a total £12 billion of new investment over the five-year period, equating to £6 million per day going into necessary improvements.
The companies must also offer financial aid to customers who are struggling to keep up with their bills, of which there are an estimated 1.5 million.
Tony Smith, chief executive of the Consumer Council for Water, welcomed the plans but warned that they may not make people better off in real terms.
Smith said: "Not everyone will see their bills fall when you add inflation and customers also need to be told how much Ofwat's financial rewards for companies could hit them in the pocket.
"Only about half of the three million households who struggle to afford their water bills will receive financial assistance under these plans".
The final arrangements for the new requirements will be finalised this December, with a period of time now allowed for water companies to make representations regarding the regulator’s plans.