The average cost of water and sewerage utilities is set to rise by 5.7%, above the rate of inflation. The new cost of water and sewerage bills in England and Wales is estimated to be an average of £376 per year, per household. Experts point out that the current rate of inflation is helping to drive up the price of water and sewerage bills.
The increase in water and sewerage rates varies across England and Wales, with the lowest rise coming in at 3.8% by Dwr Cymru and the highest being 8.2% from Southern Water. For water only companies, the lowest rise is 1.8% from Veolia Central, whilst the highest is 8.8% at Bristol Water.
Ofwat, who regulate the water industry, have indicated that for many people the rise in water prices will be unwelcome in the current economic climate. However, the price rises are part of a five year plan to help fund £22 billion of investment, which began in 2010.
Many companies had wanted to raise their prices by over 10% but Ofwat were keen to prevent this as far as they could. However the level of investment need to secure the water supply for the future has meant that prices have needed to rise.
The water companies do not make enough profit to pay for the investment up front and have had to secure outside funding. This way, the companies are able to keep water bills lower than they would need to charge if they had to fund the infrastructure projects themselves.
Ofwat point out that different regions have different levels of investment needs which is why some areas face bigger rises. For example, Southern Water have the largest rise in prices as funds need to be invested into a combination of new housing estates as well as a programme of coastal protection.
Ofwat indicate that this was why some companies were allowed to raise their prices beyond the rate of inflation in November 2011, 5.2%. However, they have warned that if companies to not meet their investment promises, they will take further action.
A spokesperson for the Consumer Council for Water said that anyone having difficulties with their water bills should contact their water company to discuss their options. They point out that many companies can offer ways to help reduce bills and provide simpler payment plans.
They added: “Companies need to tell their customers very clearly what they are getting for their money and to help customers who are having difficulty paying their bill. We will be working with companies and the regulator throughout the next price review to ensure that future water prices are acceptable and affordable.”
One option for people is to have a water meter installed to help reduce the amount of water they use. It is estimated that this can reduce consumption by 20% and save £75 off an annual bill.
Other steps people can take to help reduce water bills include using water saving devices, limiting the use of hosepipes, fixing any dripping taps and ensuring they are off when not in use.