United Utilities has today announced that it plans to cut water bills by 10.5 per cent in real terms by 2025, following unprecedented levels of engagement with customers across the North West.

The water company has today submitted its business plan proposals to the sector’s economic regulator Ofwat, outlining how it aims to provide better water and wastewater services at a lower cost over the coming five-year period.

If the plans are accepted, bills would fall by £45 in real terms by 2025, which will support 250,000 customers moving out of water poverty.

The plan includes a drive to reduce water leakage by 15 per cent and improve the resilience of water supplies, along with improving the quality of rivers in the region.

United Utilities has also flagged up the fact that the planned investment spend is down from £7.2 billion in AMP5 2010-15 to £5.9 billion for 2020-25. The water company has attributed the drop to a transformation of its level of efficiency in AMP6, enabling it to provide a better level of service at significantly reduced costs. United Utilities estimates that over £400 million of this resulted from innovations introduced in AMP6 which will continue into AMP7.

An additional £359 million of savings has been made via the application of an industry-leading market testing framework to 100% of its cost base. The approach, developed with Salford University, has revealed new and better means of procuring products and services from the market.

United Utilities commented:

“Our cost reductions in AMP& are greater than those observed across many other industries and we expect that our proposals will be significantly below Ofwat’s assessment of efficient costs.

Key performance commitments in United Utilities’ plan include:

• Improving dam safety through an industry leading reservoir resilience programme
• Developing a catchment based approach and extending safeguard zones to improve resilience
• Reducing leakage by 15% to help ensure long term supply resilience
• 33% reduction in supply interruptions in AMP7
• Significant reductions in per capita consumption, reducing it by over 3% in AMP7 and 13% by 2045
• 30% reduction in sewer flooding in AMP7
• 100% of biosolids will be compliant with the Biosolids Assurance Scheme in AMP7
• Fewer tonnes of Nitrous Oxide emitted for every unit of renewable energy generated

Commenting on the plan, Louise Beardmore, Customer Services Director at United Utilities, said:

“We have drawn up our proposals after asking the views of a record number of customers and stakeholders – more than 140,000 customers took part in the engagement process and our consultation campaign reached 1.7m people across the North West.

“We’ve listened to their feedback and we’ve shaped our plan to deliver more for less. Affordability is a hugely important issue for many people in our region and if our plans are approved we will be able to provide additional financial support for 150,000 customers and move a quarter of a million people out of water poverty.

“And from 2020 we are planning to launch a new commitment called CommUnity Share, which means that if our dividends are much higher than expected, we will share the benefit with customers and communities across the North West through a ‘CommUnity Dividend’ – delivering further bill reductions, more financial assistance for customers or community grants.

“This is in addition to our existing approach to benefit sharing with customers which has seen over half a billion pounds reinvested for customer benefit over the past decade.

“We believe our business plan strikes the right balance of affordable prices, better services and shared rewards if we outperform our ambitious proposals.”

Other initiatives outlined in the plan include:

• Proposed incentives through a Systems Thinking ODI for additional innovation and adoption of technology to manage water and wastewater networks
• Innovation in catchment services - extending its boundaries into water quality, resources and flooding initiatives in AMP7
• Raising the level of key assets to the first floor at key sites and securing additional “alternative supply vehicles” to provide flexible and nimble responses to water supply issues.
• Raising the bar on operational resilience and learning lessons from AMP6 - resilient services to be delivered primarily through the core totex budget in AMP7
• Beyond the core totex budget - a major resilience investment to ensure the resilience of potable water supplies to populations in Manchester and the Pennines by delivering replacement tunnels for Haweswater Aqueduct in AMP7 and AMP8 via direct procurement approach

Click here for more information about United Utilities AMP7 plan.