Regulator Ofwat blamed for high water bills

Water regulating company Ofwat has been criticised by MP’s for allowing suppliers to make a £1.2bn windfall, through charging households more than is necessary.

A report from the Public Accounts Committee stated that Ofwat had consistently overestimated companies’ financing and tax costs when setting their price limits, between 2010 and 2015. The PAC said that this meant the companies had made windfall gains of at least £1.2bn between them. As a result millions of households in England and Wales are paying excessive amounts for their water supply.

The report said that many householders would be “appalled” to learn that their water bills could have been considerably smaller, whilst OFWAT remarked that it would “carefully consider” the PAC’s report. Household water bills were averaged at £396 per year, last year.

The committee of MP’s has said that it was concerned that consumers in areas of water scarcity were paying to develop expensive new capacity, despite the possibility of water trading with other companies being more cost effective. The committee is urging Ofwat to review the way it assesses companies’ cost of tax and to report back to them on how it intends to improve.

PAC chairman Meg Hillier has remarked “Ofwat was set up to protect the interests and customers, most of whom have no choice over who supplies their water yet must pay bills typically running to hundreds of pounds. This approach must be reviewed as a priority”.

Ofwat Chief Executive has been talking of the improvements that will be made, Cathryn Ross said, “Holding companies to account and protecting customers is at the heart of what we do. That’s why we’ve made sure bills will fall by 5% by 2020. If companies don’t step up, we’ll step in”.

TNT Business Billy Rooney


photo credit: balog

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