This site uses the UK Government AccessKeys system
|
|
What's new | Publications | Media centre | Price review | FAQs Update alerts | Consumer issues | Site map | Competition | Contact us |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Media centre
Ofwat warned today that customers face hefty rises in their water bills if ambitious improvement programmes are confirmed. Ofwat has completed its preliminary analysis of companies' draft business plans. Although they are based on the companies' early views, they provide an important starting point for decisions next year on price limit increases needed from 2005 to 2010. The analysis shows that some price increases for many companies' customers are needed simply to maintain the huge improvements achieved over the last 15 years. Although companies will be expected to make further efficiency savings, these will generally be insufficient to offset rising cost pressures. But if the proposals for £20 billion of new investment were confirmed then this would lead to very substantial price rises for most customers. At a conference on water industry matters today, Philip Fletcher, Director General of Water Services, will say: "It is too early to say what the outcome of the review will be. But hard choices will have to be made about the size of the expenditure programmes the companies are expected to carry out if we are to set price limits that are recognised by customers generally as appropriate and necessary. "There is a clear challenge to water companies to show that their plans represent value for money for the customer and that they are properly sharing the risks. And there is a clear challenge to the quality regulators seeking major water quality and environmental improvements to justify them fully. "Ministers will have some difficult decisions to make on whether all of the proposed drinking water quality and environmental improvements are essential, and on the pace of delivery of those they agree are needed. "If the programmes of works which each company will be expected to deliver remain unchanged from those set out in the draft business plans then there can be little doubt that water bills will need to rise substantially. "The price limits that I set will need to be sufficient to allow each company to finance its obligations on a long-term and sustainable basis. But the limits will be no higher than is necessary in order to protect the customers of these monopoly companies." Ofwat is publishing today the latest in a series of key price review documents, 'Setting water and sewerage price limits for 2005-10: Overview of companies' draft business plans'. This will provide a better understanding of the key issues arising from Ofwat's scrutiny of companies' draft plans. Note to Editors: 1. The Director General of Water Services is the economic regulator of the water and sewerage companies in England and Wales. He exercises his powers in a way that he judges will allow them to carry out their functions properly, and finance them. WaterVoice represents customers' interests. 2. Ofwat will advise Ministers on the prospects for price limits in December based on the companies' draft business plans. In January 2004, Ministers will issue their final guidance on the quality improvement programmes that companies will be expected to deliver between 2005-10. 3. Companies' final business plans will be submitted to Ofwat in April 2004. Ofwat will issue draft price limits for consultation in July 2004, and final price limits in November 2004. These will take effect from April 2005. 4. The price review document, 'Setting water and sewerage price limits for 2005-10: Overview of companies' draft business plans', will be available on the Ofwat website on www.ofwat.gov.uk or from the Ofwat library on 0121 625 1373. 5. Philip Fletcher will be speaking today at Economist Conferences' 14th Annual Water Industry Conference, taking place at The Radisson SAS Portman Hotel, Portman Square, London, W1H 7BG. For a press pass, contact Tara Craig on 020 7887 4490 or by e-mail at taracraig@economist.com. The speech will be available later today on the Ofwat website. 6. The quality regulators and the Government issued a joint statement in August 2003 (PN 29/03 on the Ofwat website) inviting comments and responses to a list of key questions on the price review. The closing date for responses to the joint statement is 5 November. 7. Taking all the companies' forecasts together, the average household bill would go up from £234 in 2004-05 to £306 in 2009-10 in real terms if companies' preferred strategies were implemented. 8. The factors driving the changes in bills, as proposed by the companies in their preferred strategy, are set out below.
Out of hours enquiries to pager: 08700 555 500 water 503/509. Ofwat publications and press notices can be found on Ofwat's website at: www.ofwat.gov.uk  | ||||||||||||||||||||||||||||||||||||||
© Crown copyright |
Disclaimer & Privacy Statement |