Concerns over possible water charge rises

The Consumer Council for Water has criticised the regulator, Ofwat's, final decision on how much Southern Water can charge.

Ofwat has said that, before taking inflation into account, Southern Water will be able to raise prices five per cent by 2015, which would mean that the average water and sewerage bill will go from 373 in 2010 to 393 by 2015. During the summer, Ofwat announced its draft proposals on how much the company might be able to charge customers over the next five years, indicating that it should reduce average annual water and sewerage bills by 7.

David Bland, chair of the Consumer Council for Water in London and the South East, said: "We are disappointed that Ofwat suggested the possibility of reduced bills for Southern Water customers, and now is allowing the company to raise prices. This is beyond what many Southern Water customers told us they found acceptable.

"We are particularly concerned that Ofwat has allowed Southern Water to progress with a very rapid metering programme, so that more than 90 per cent of Southern Water's customers will have a water meter by 2015.

While some customers will see bills go down when they are provided with a water meter, others will see their bills rise. We are particularly concerned about the impact this will have on low income families with children.

"We would rather Southern Water's metering programme was spread over a longer period to enable a stronger system of financial support to be put in place to protect those whose bills could become unaffordable. We are urging to ensure that this transition is carefully planned to take account of these potential impacts, and that they are managed appropriately.

"Customers should keep in mind that the prices being announced today might not be what they see on their bills by 2015. These are average prices, so changes in water and sewerage bills will vary from customer to customer, depending on their circumstances. For example, there will be variations between metered and un-metered customers' bills.

"There is also a risk that things could crop up over the next five years which might add costs on to customers' bills; for example, work needed to transfer responsibility for private sewers, and to meet environmental targets from new European legislation."

Southern Water's chief executive Les Dawson said: "We need to take on board what Ofwat is saying and see how we can continue our commitment to delivering our four million customers first class services over the next five years.

"In particular, we must look closely at how we can deliver investment in improved services, especially in areas customers have told us they would like to see.These include drinking water quality, a reduction in flooding and pollution incidents, full household metering and carbon reduction measures, including power generation from waste."

Southern Water has invested around 2billion in capital investment improvements since 2005. It says this has helped the company achieve low leakage levels, and ensures a 99.2 per cent pass rate for wastewater treatment works meeting European quality standards.