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Ofwat agrees to let water bills rise

Following consultation, the water regulator Ofwat today confirmed that it would allow two water companies in England to increase their price limits.

The decision will permit Northumbrian Water (including the Essex and Suffolk region) and United Utilities to raise water and sewerage charges for the remaining year of the current price review period, from April 2004 to March 2005.

The water companies had lobbied for more money saying they needed to fund improvements and monitoring water standards. They also said they needed help to cover rising customer debt problems.

Director General of Water Services, Philip Fletcher, said:

"I regret the need for an increase, but I have a responsibility to ensure that prudent and well-managed water companies can finance the services they provide to customers. The extra costs the two companies face are substantial enough to require an increase in bills.”

The decision means the companies will be allowed to increase prices by a higher amount than proposed in the provisional decisions published in November.

Northumbrian Water, will be allowed to raise average water and sewerage bills by about £21 to £233 in 2004/05 and their customers in Essex and Suffolk will see average rises of about £11 to £128 during the same period.

Average water and sewerage bills for consumers supplied by United Utilities will increase by about £21 to £273 in 2004/05.

Water companies across Britain have been pressuring Ofwat to allow them to raise prices to help pay for improvements to services.