United Utilities told to cut bills by regulator
THE water regulator Ofwat has ruled that customers’ bills should be cut by up to 5% over the next five years.
Before adjustments for inflation, average bills between 2015 and 2020 will fall in England and Wales by around £20 to £376.
In the North West, where homes and businesses are supplied by United Utilities, Ofwat said bills would fall 3% from £410 to £398.
Warrington-baed UU, which could still challenge Ofwat’s decision, said in a short statement: “As part of the 2014 price review process, Ofwat has today, as scheduled, published the final determination for United Utilities Water Limited (UUW) covering the period 1 April 2015 to 31 March 2020.
“UUW is reviewing this and has two months in which to consider and decide whether to accept its final determination. “
The company proposed not to cut, nor increase bills, when it put forward a five year business plan to the regulator last year.
A spokesman of Ofwat told TheBusinessDesk.com: “The ball is very much in United Utilities’ court. It must decide over the next two months whether to ask the matter to be referred to the Competition and Markets Authority for an independent review.”
As well as price cuts, Ofwat also said it wants customers to see improved levels of service over the next five years. Companies are set to spend more than £44bn or around £2000 for every household in England and Wales over the next five years. By 2020 customers will benefit from substantial improvements in areas of service that really matter to them, including:
:: more than 370 million litres a day saved by tackling leakage and promoting water efficiency – enough water saved to serve all of the homes in Birmingham, Manchester and Leeds;
:: a reduction in the time lost to supply interruptions (down on average 32%);
:: 4,700 fewer properties flooded by sewer water; and
:: cleaner water at more than 50 beaches.
The number of people benefiting from financial support will more than double to around 1.8 million by 2020.
Jonson Cox, Chairman of Ofwat said: “This is an important step in maintaining customers’ trust and confidence in the water sector. We set out to deliver a challenging but fair outcome.
“We are requiring companies to meet higher service standards and deliver on their promises to customers. We are bringing down bills so customers can expect value for money, while investors can earn a fair return. Companies will need to stretch themselves to deliver much more with the same level of funding as in previous years. We will achieve more resilient infrastructure and better service as a result.”
Cathryn Ross, chief executive of Ofwat added: “With bills held down by 5% and service driven up over the next five years, customers will get more and pay less. Where companies stepped up to do the best they could for their customers we did not need to intervene. But where companies fell short we stepped in to make sure customers get a good deal.
“Now the hard work begins. Companies will only build trust and confidence with their customers if they deliver. Those who do can look forward to fair returns, while those that don’t will be hit in the pocket and face a tough five years ahead.”
