By Max Clarke

Many water customers in England and Wales may be surprised by the increases to bills announced today by water regulator, Ofwat, says watchdog the Consumer Council for Water.

In 2009, Ofwat announced that average water bills would, in real terms, remain broadly flat until 2015, but the impact of an inflation rate of almost 5% will mean many water customers paying more — and water companies enjoying an unexpected financial gain.

The average bill is set to rise by 4.6 per cent or about £16 to £356. This takes into account a reduction in the average bill of 0.1 per cent before inflation of 4.7 per cent.

Dame Yve Buckland, Chair of the Consumer Council for Water, said: “Under the current system of regulation, water companies are allowed to add inflation to the price limits agreed with Ofwat.

“We recognise that water companies are facing some additional costs in other areas and that there are ‘swings and roundabouts’ on this issue. However many water companies and their shareholders will benefit from higher inflation.

“Many customers are struggling with rising household and other bills and debt is rising. Already one in six customers tells us that they cannot afford their water bill. The bill announcements today will particularly add pressure to some customers in the south west of England, who already pay the highest bills.

“Water companies need to make profits and that’s fine, but when water companies have done well financially in the past, the Consumer Council for Water has been successful in persuading them to give back £135m to customers in the form of lower prices and additional investments in the water and sewerage network, to benefit customers. We will be talking to the companies to see how this can be repeated in this price period.

"People can shop around for the best deal on many things, but not water. Our job is to do this for them." Said
Regina Finn, Ofwat Chief Executive Officer.

"No one wants to see bills increasing, particular in tough economic times. When we set limits on prices, we listened to customers and challenged companies hard. That's why average bills are set to remain broadly in line with inflation up until 2015, while companies are investing more than ever before, £22 billion. That's more than £935 for every property in England and Wales.

“Anyone who might be struggling to pay their water bill should contact their company immediately. There may be an appropriate scheme offering more flexible payment options, such as weekly or monthly payment plans, special assistance funds, or possibly a special tariff scheme to help eligible customers reduce their water bill.”