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PN 01/12 Water and sewerage bills to rise in 2012

31 January 2012

  • Average bill to rise by 0.5% above inflation to £376
  • More than £22 billion investment programme over five years

The average household water and sewerage bill in England and Wales is forecast to increase by 5.7%, or about £20. This takes into account a rate of inflation of 5.2%1, and will mean an average bill of £376 in 2012/13.

In 2009 Ofwat made its decision on how much water and sewerage companies could charge customers between 2010 –15. The regulator's challenge of companies' proposed bill rises meant that across England and Wales average bills are set to remain broadly in line with inflation by 2015. And around ten per cent lower than what companies asked for. This is before inflation is factored in. The rate of inflation is added to bills on a year-by-year basis.

Regina Finn, Ofwat Chief Executive Officer said:

“When we set limits on prices, we listened to customers. They told us they wanted bills kept down, while maintaining safe, reliable water supplies. We challenged companies hard to deliver this. Our decision meant that, before inflation, average bills would remain broadly stable between 2010 -15.

“We understand that any bill rise is unwelcome, particularly in tough economic times. 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 to us all – 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 bill changes for this year will come into effect on 1 April 2012 and apply until 31 March 2013. 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.

Investment between 2010 -15 will allow companies to ensure customers continue to see improvements and receive a safe, reliable supply of drinking water. Key benefits of the investment will include:

Safe, reliable supplies


  • Improve 140 water treatment works and 550 sewage treatment works to maintain and improve the environment and drinking water quality.
  • Over 10,000km of water mains being improved or replaced – more than the equivalent of London to Cape Town.
  • More than £1billion will be spent on maintaining and improving drinking water quality.
  • Investment in cleaning the mains pipe supplies serving more than one million people to help reduce discoloured water.

Protecting customers


  • Extreme events such as flooding can severely disrupt water supplies. Almost 10 million people will benefit from investment to guard against them being without water.
  • Addressing sewer flooding problems for more than 6,300 properties.

Environment


  • Maintain or improve more than 3,000km of rivers to meet EU environmental standards.
  • Improve water quality in more than 55 wetlands and bathing waters.
  • More than 100 schemes to work with farmers and landowners. This will help control pollution and reduce costs by better use of land, preventing pollution of drinking water sources requiring costly treatment.

Saving water and using energy wisely


  • By 2015, the water savings that companies will make by meeting water efficiency targets, reducing leakage, and increasing metering will amount to more than 100 billion litres per year. That is enough water to supply the cities of Liverpool, Bristol and Brighton for more than a year.
  • Between 2010-15, companies are investing in renewable energy sources generating enough extra electricity to power around 90,000 homes. That is more than enough electricity for all the homes in Portsmouth. This will both help reduce carbon emissions and keep water bills down.

Average household bills in 2012/13 (including 5.2% rate of inflation)a

Please note: some figures may not add up due to rounding

Company

Water

Sewerage

Combined change

Value

Change

Value

Change

Value

% Change

Water and sewerage companies

Anglian £189 £10 £234 £12 £22 5.4%
Dŵr Cymru £178 £6 £249 £9 £16 3.8%
Northumbrian            
    Northumbrian (excluding Essex & Suffolk) £161 £8 £191 £9 £17 5.1%
    Essex & Suffolkb £217 £12     £12 5.9%
Severn Trent £171 £8 £154 £7 £16 5.0%
South West £228 £11 £315 £13 £24 4.7%
Southern £149 £10 £267 £21 £31 8.2%
Thames £199 £7 £140 £14 £21 6.7%
United Utilities £190 £7 £205 £11 £18 4.7%
Wessex £234 £15 £221 £10 £26 6.0%
Yorkshire £166 £9 £195 £12 £21 6.1%
    

Change (water only)

Value

% Change

Water only companies

Bristol £181 £15     £15 8.8%
Cambridge £127 £6     £6 5.4%
Cholderton £204 £7     £7 3.6%
Dee Valley £145 £7     £7 5.4%
Portsmouth £94 £3     £3 3.3%
Sembcorp Bournemouth £153 £5     £5 3.5%
South East £204 £9     £9 4.6%
South Staffordshire £140 £8     £8 6.4%
Sutton & East Surrey £181 £12     £12 7.3%
Veolia Central £174 £3     £3 1.8%
Veolia East £173 £5     £5 2.9%
Veolia Southeast £188 £6     £6 3.3%
   

Combined change

Value

% Change

Industry average (weighted)

£182 £8 £195 £12 £20 5.7%

a) Average bills for 2012-13 are estimates. They are based on provisional and forecast data that each company provides for the year ending 31 March. The average household bill is, by definition, an average across all customers. Individual customers' bills may be more or less than the average because of their particular characteristics, for example, whether they have a water meter. Changes to customers' bills will vary according to which company supplies them. Some customers receive their water services from one company and receive their sewerage services from another. To calculate the average combined bill, you must add the average water bill to the average sewerage bill.

b) The % change for Northumbrian - Essex and Suffolk is for water only bills, as they only provide water services.

Notes to Editors


  1. The inflation figure used is 5.2% - the Retail Price Index (RPI) annual inflation in November 2011, as released by the Office of National Statistics in December 2011.
  2. For 2011/12 bills the RPI annual inflation was 4.7% and for 2010/11 it was 0.3%. The last time RPI annual inflation for November exceeded 5% was in 1990 when it was 9.7%.
  3. The Water Services Regulation Authority (Ofwat) is the economic regulator of water and sewerage companies in England and Wales. It exercises its powers in a way that it judges will protect the interests of consumers, promote value and safeguard future water and sewerage services by allowing efficient companies to carry out their functions properly, and finance them.
  4. Further information about specific companies’ bills and charges will be available from the relevant water companies. Company contact details are available on: www.ofwat.gov.uk/consumerissues/watercompanies/map/#swt
  5. Media enquiries to Ofwat Press Office on:
    Benedict Fisher 0121 644 7642 / benedict.fisher@ofwat.gsi.gov.uk
    Harbinder Babra 0121 644 7616 / harbinder.babra@ofwat.gsi.gov.uk
    Simon Markall 0121 644 7696 / simon.markall@ofwat.gsi.gov.uk

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