Leaking pipes and other plumbing emergencies should be less of a heartache for consumers in the coming years, as utilities regulator Ofwat has issued draft proposals that could see water and wastewater bills fall in the immediate future.
The plans will see the cost of these utilities decline by 5% in real terms from 2015 to 2020, while simultaneously improving standards of customer service. The initiative will be bolstered by an investment programme that will see the average house in England and Wales see improvements worth almost £2,000, which will cost £43 billion across both nations.
As well as lower bills, customers should see the length of time it takes to resolve supply interruptions fall by 40%, while over 50 beaches will see their water quality improve. Furthermore, the amount of water consumed in the countries is estimated to fall by 340 million litres a day due to the scheme, thanks to water efficiency initiatives and an increased focus on resolving leaks – the same amount of water used daily by every household in Leeds, Liverpool and Birmingham combined.
Ofwat will increase the scrutiny water suppliers are put under and intends to oblige utility firms to consider what customers can afford when setting prices. When firms submitted their billing plans to the regulator, all but two had proposed bills that were held at or were under inflation, suggesting that Ofwat’s plans are succeeding. Additionally, the regulatory body’s investigation of companies’ financing expenditure is estimated to save customers £2 billion in the next five years.
Ofwat Chief Executive Cathryn Ross described the proposals as “good news for customers”, stating that rather than box-ticking and regulations, water companies will be driven by the need to deliver good standards of service over the next five years.
Firms that manage to perform as expected will “reap the benefits” due to improved customer confidence and trust, she added.
Consumer Council for Water Chief Executive Tony Smith said the announcement reveals that utility customers are driving water bills “more than ever before”. However, he argued that Ofwat could still provide customers with a better deal, noting that inflation could still see some people’s water bill rising despite the intended 5% decline. If the regulator focused on companies’ borrowing expenses, bills could fall even further, he remarked.
Mr Smith noted that one fifth of British households has said that their water bill is currently unaffordable.
Ofwat is holding a consultation on its proposals, during which stakeholders and company representatives will be able to discuss the plans and analyse their potentiall impact. It intends to make a final decision on the proposals in December.
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