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Bills to be cut by 4%

August 7, 2009 at 4:32 am

It may not seem a huge amount but in a recession every little helps, so the news released today by Ofwat of proposed cuts in water bills of 4% should bring a smile to consumers’ lips.

In terms of hard cash this will equate on average to £14 per household, meaning that the average water bill will be reduced to £330 per annum before inflation.

Many will of course be disappointed by the news, and not just householders either, who had no doubt been hoping for a more generous reduction. Water companies are disappointed too, since they had called for an increase of £28 a year in order to deliver what their customers want, in particular a huge reduction in leakages in the system.

David Owens of Thames Water has already said that Ofwat’s announcement will mean that they can do nothing about leaks for the next five years. Metering programmes may also be affected adversely by the regulator’s decision.

Ofwat, on the other hand, have said that their decision still allows investment of £21 billion for the period 2010 to 2015. Regina Finn of Ofwat has pointed out that consumers can shop around for good deals on other utilities but with water they have no element of choice, hence the regulator’s decision to challenge “the companies’ plans rigorously”.

A consultation period will now follow and a final decision made in November with the new charges coming into effect next April. The water companies also have the opportunity to appeal to the Competition Commission.

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