UPDATED: edie poll proves businesses divided over water pricing
Businesses are divided over plans by Ofwat to increase water bills, with an edie poll suggesting a near even spilt between those in favour and those against the increase.
The changes to water bills were announced by Ofwat last week (January 31) with the changes set to come into force from April 1 this year.
As a result, the average household water bill is expected to rise by 5.7% in 2012-13, adding an additional £20 to annual bills and bringing the average bill to £376 per year.
However, Ofwat said that average bills for businesses are more difficult to estimate as most firms negotiate different rates with their water supplier.
In a recent edie poll we asked: “Do you think the increases in water bills are fair and acceptable for business users?” The results showed that 37% of edie readers felt the increases were acceptable, while 33% felt they weren’t. The remaining 30% of respondents said they weren’t sure.
Water consultancy group Cadantis told edieWater that Ofwat ceo Regina Finn failed to mention that the Retail Price Index (RPI) was 4.7% in November 2010 and 5.2% in November 2011, arguing “that is a big hit for most homes and businesses”.
However, Ofwat said the price hikes are necessary to pay for major water investment programmes, worth £22bn, including water quality improvements to the UK’s rivers and facilities upgrades, as well as a host of renewable energy projects.
Ofwat chief executive Regina Finn, said: “We will make sure customers get value for money. Companies are investing £22bn by 2015 – more than £935 for every property in England and Wales. This will deliver benefits to us all – from continuing to improve reliability of supplies to cleaner rivers and beaches.”
However, sewage clearing and repair contractors Drain Claim ceo David Hayes said he believes the rises are unfair and that the transfer of ownership of private sewers to water and sewerage companies in October 2011 is “partly responsible for this sudden rise in water bills”.
He said: “It appears that customers already struggling in the recession are to be hit by this sudden rise in bills”, adding that the transfer of responsibility for drainage and sewers under the Defra bill has resulted in water companies recouping their extra costs of maintaining the systems from the consumer.
Mr Hayes said that “it is hard to accept that these rises are purely down to inflation as Ofwat chief Regina Finn has claimed. Rather, I would argue that the backlog of maintaining, repairing and renewing many thousands of miles of pipes is already hitting water companies hard.”
As a result, he warned that as “upping water bills is the quickest method of recouping these costs that he “wouldn’t be surprised if, despite the current economic climate, we see further bill increases in the future”.
How will your business be affected by the increase? Let us know your thoughts below.
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