Water companies set out final business plans

Water companies' final business plans, submitted to Ofwat in May, suggest that the average water bill will rise by 29.2% by 2010. The plans will be subject to further revision by Ofwat before draft price limits are set in August.

The plans indicate that the average bill in England and Wales will increase from £240 in 2004/05 to £310 in 2009/10 (see table). Although this is slightly below the 31% increase in draft plans submitted last year, the investment programme has actually risen from £21 billion to £22 billion.

Some of this increase has been necessitated by most companies' failure to include essential environmental schemes in their draft plans.

The slight change in average bills hides substantial changes to some companies' plans:

  • South West Water's investment programme has expanded massively. Its bills are already the highest in the country and are now projected to average £467 by 2009/10.

    The company's final plan reveals that it has to expand its environmental programme, provide water and sewerage services to two new towns in Devon, and increase provision for customers opting for water meters and for bad debt.

  • Southern Water now forecasts the largest rise in bills of 45%. Its estimated average bill for 2009/10 has risen from £339 last year to £358, and its investment programme increased to just over £2 billion.

  • United Utilities proposed for a huge £3.8 billion investment programme which would have pushed prices up to £416 by the end of the decade. This has now been trimmed to £3.2 billion, cutting bills to £356 by 2010.

    Major savings have been made in the company's environment and quality programme, cut from £2.2 billion to £1.5 billion.

  • Anglian Water has trimmed its sewerage investment substantially since its draft plan. Its overall investment programme has been cut from £2.7 billion to £1.8 billion.

    Anglian now has the lowest projected rise of all companies of 17%. Its average bill in 2009/10 has been cut from £379 to £331.

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