Saving money news

Energy prices are a postcode lottery

29 March, 2007

Water customers in England and Wales will see their bills rise by an average of 7 per cent in April.

The increases are being implemented despite profits of £2.6 billion enjoyed by the water companies in 2005/06 – a year that consumers will best remember for water shortages, drought warnings and hosepipe bans.

A number of water restrictions were in place throughout 2006. Since 3 April 2006 almost 6.2 million households – or 13 million people, have been subject to water restrictions by water companies. Yet this limited service was not enough to prevent companies to expect consumers to pay more.

Ofwat, the regulator, sanctioned the proposed price increases in2005 and now 23 of the 24 water companies across the UK are opting to implement them.

South West Water is taking full advantage by increasing its prices by over 10 per cent. This means that it will continue to be the most expensive supplier with an annual water and sewage bill of £483 - £208 more expensive than the cheapest supplier, Thames Water. Only Tendring Hundred is choosing to lower its prices, by 2.8 pre cent.

But there is worse news ahead for Thames Water customers. Their bills could increase by up to 50 per cent in the next decade if plans for a new £2 billion sewerage system for London to go ahead.

According to Thames Water, bills could go up by £37 a year to pay for the new system. However, Ofwat has expressed doubts over these figures, indicating that the cost to Londoners could be higher.

Despite the current increase in prices, 4 out of 22 companies failed to meet or out-perform their leakage targets, the worst culprit being Thames Water who failed to meet its leakage targets for the 3rd year in succession last year, and accounted for almost a quarter of all water lost across England and Wales in 2005-06.

Ann Robinson, Director of Consumer Policy at uSwitch.com, said: “Householders across the UK will quite rightly be wondering why they are being expected to pay even more for a service that is clearly substandard. The average household in England and Wales is now looking at having to spend, on average, over £100 a month just to provide the essentials of heating, light and water.

“The water companies have known for years that they are sailing a leaky ship, but have little more than plug the holes with their fingers. Now customers are being forced to bail them out – if this isn’t to be good money after bad then the water industry needs to make a concerted and cohesive effort to get shipshape, watertight and to plug the leaks once and for all.”