Business

Water bills set to fall despite firms facing extra £12bn investment bill

The regulator Ofwat’s latest price review, which covers expectations for the next five years, proposes the firms collectively invest an extra £12bn in the network – on top of their current commitments.

This would help maintain assets, such as water pipes and sewers, and create additional water storage to bolster the environment and customer service, Ofwat said.

Targets include cutting pollution incidents by more than a third, reducing supply interruptions by almost two-thirds and helping 1.5 million customers who are struggling to pay their bills.

Ofwat said its demands over leakage would save water over the period equivalent to the needs of the populations of Manchester, Leeds, Leicester and Cardiff.

It said that falling financing costs and greater efficiency demands of companies would allow for household bills to fall by an average £10 annually before inflation over the five years.

The regulator said it believed that even when the effects of inflation were included – using the CPIH measure which is currently running at an annual rate of 1.9% – the savings would still result in a significant real terms reduction in customer payments.