Proposals set out by Ofwat, the water regulator, will see reduced water bills in the average household between 2010 and 2015. The news was welcomed by debt management advisers, since any reduction in household bills will help consumers that are struggling with debt repayments, particularly at this difficult time.
The regulator sets limits on what prices sewerage and water companies can charge, every five years. If the Ofwat proposals are accepted, this would mean that the average bill would fall by around £14 to £330, once the figures have been adjusted to take account of inflation. According to the regulator, the water companies would still be in a position to invest £21 billion over this 5 year period, in improved services.
Many consumers have been suffering financial hardship in the wake of the current recession. A lot of people became overcommitted in the good years, borrowing too much money on personal loans and running up excessive credit card debt. News that the cost of water will be coming down, has been welcomed by consumer groups and debt advice specialists.
Business plans were submitted by the water companies to the regulator in April this year, and Ofwat has suggested investment levels and set price limits for each supplier. A final decision will be reached by the regulator in November, after a period of consultation.
There will be an opportunity for the water companies to renegotiate their situation in September and they will also have the option to appeal to the competition commission, if they are not happy. The new bills will then come into effect around April next year.
