Industry

03 SEP 2018

UK WATER FIRMS VOW TO CUT BILLS AND INVEST RECORD AMOUNTS INTO INFRASTRUCTURE UPGRADES

Water companies around the country have pledged to cut bills for millions of consumers while investing billions of pounds into upgrades to cut leakages by more than 16% over five years - the equivalent of 184 Olympic-size swimming pools of water being saved every day by 2025.

The announcement comes as the UK water industry unveils its plans for the next five-year business period running from 2020 to 2025. Water companies in England and Wales are required to submit business plans to the economic regulator, Ofwat, for approval, every five years.

The Manifesto for Water which was published today (3 September) reveals how the sector will commit to spending more than £50bn in the five years – a 13% increase on the current period.

Water UK, the lobby group for the industry in the UK, said the investment by nine main providers and a number of smaller firms will improve services to customers, keep upgrading the network, and deal with issues caused by population growth, new houses and climate change.

The manifesto release follows a December announcement by Ofwat in which it said as a result of its price review bills would be cut between £15 and £25 a year from 2020 to 2025.

Today, Severn Trent and United Utilities have promised to cut the average bill by 5% and 10.5% respectively. While Thames Water said bills would be unchanged and South West Water are offering customers a stake in the business. Anglian Water said its bills would rise - but by less than 1%.

John Russell, Ofwat senior director for strategy and planning, described the pledges today as a “milestone” in the regulator’s price review process. “From now and until January 2019 we'll pore over each and every business plan and we'll be looking for evidence that they are robust, ambitious and, crucially, that they have been shaped by customers,” he added.

The UK’s largest water company Thames Water will spend £11.7bn on upgrades for the period 2020-2025. It plans to invest a record amount on improving infrastructure after paying heavy compensation over leakage failures with £2.1bn ring-fenced specifically to boost resilience and reduce leakage.

Commenting on the pledge by water firms, Michael Roberts, chief executive of Water UK, said: "The industry has a strong track record in providing customers with a world class product and service. We've cut bills, increased help for the less well-off, and reduced leakage by a third, and we are committed to achieving even more for customers in the future."

Responding to the Manifesto for Water, a National Infrastructure Commission spokesman said: “With as much as 20% of mains water lost to leakages every day, it is encouraging to see water companies setting out five-year plans to tackle this issue. However, the threat of hosepipe bans this summer showed the need to shore up water supplies, and so we want to see companies look even further ahead, with a clear target to halve leakages by 2050. That, combined with a new water transfer network to support areas suffering shortages, and measures to reduce demand, would greatly improve the resilience of our infrastructure for the future.”

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