Energy News

Water bills rise sharply as Brits' water debts up 32%

Wednesday 1 February, 2012

By Martin Fagan

Inflation-busting rises in water bills as an increasing number of households are already in debt to their water supplier.

Families in England and Wales face an average rise of 5.7% to water and sewerage bills from April, according to Ofwat.

The water regulator - which sets price increases for the water companies - says the bill changes for this year will come into effect on 1 April 2012 and apply until 31 March 2013.

The rises, which are based on a rise in the retail price index in November 2011 of 5.2% plus a further 0.5%, will mean an average annual bill of £376 throughout the UK.

The impact of the new charges will vary for individual household customers depending on the company that supplies them and whether or not they have a water meter.

However, the average rise of 5.7% means some areas will have small rises, but some areas will see inflation-busting hikes. According to Ofwat’s figures, customers at Southern will see an 8.2% rise, while customers of Dwr Cymru will see a 3.8% increase.

In 2009, the regulator set the size of "real" rises in charges for the years 2010-2015, with the aim of keeping average bills almost in line with inflation. Ofwat says the new increase is 10% less than the rise asked for by water companies.

“We understand that any bill rise is unwelcome, particularly in tough economic times,” said Regina Finn, chief executive officer at Ofwat.

“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. This will deliver benefits from continuing to improve reliability of supplies to cleaner rivers and beaches.

“If companies don't deliver on their investment promises, we will take action.”

The news of the hike in water and sewage prices comes as the charity Money Advice Trust saw a big jump in water debt calls in 2011, up 32% on 2010. Over the last five years, the charity says water debt calls have increased 432% and the price rise is likely to make the problem even worse.

Joanna Elson OBE, chief executive of the Money Advice Trust, said: “The sobering fact is that paying water bills is becoming increasingly difficult for many households, and it doesn't appear to be a problem that will go away any time soon. Indeed, planned price rises will most likely make the problem even worse.

“Whilst the price rises may be in line with inflation, they are not in line with any growth in earnings, meaning water bills will take up more and more of the money we bring in.

“We are working with the water industry to explore better ways of helping struggling consumers.”