Water industry regulator Ofwat has announced this morning that the average household water and sewerage bill in England and Wales will increase by 3.5%.

Commenting on the rise, Regina Finn, Ofwat Chief Executive Officer said:

“Customers can’t choose their supplier. It’s our job to make sure they are protected. Back in 2009, companies wanted bills rises of 10 per cent above inflation. That didn’t chime with what customers told us they wanted, so we said they could only increase bills in-line with inflation.

“We understand that there is huge pressure on household incomes, and any rise is unwelcome. Inflation is driving these increases.”

“There are longer term challenges if we are to continue to keep bills down. Unpredictable rainfall, and population growth in areas where water is already stretched, means we need to get better at managing and sharing our water. If we don’t, customers will lose out.

“Our proposed changes, combined with recommendations in the Draft Water Bill, mean there is a total of £3 billion worth of benefit on the table for customers if we make the right changes. We cannot afford to stand still, if our water supplies are to remain both affordable and sustainable in the decades to come.”

The bill changes will come into effect on 1 April 2013 and apply until 31 March 2014. The impact of the new charges will vary for individual household customers depending on the company that supplies them and whether or not they have a water meter.

However, within the average increase there is wide variation between the companies – around half are introducing below-inflation rate increases with the remainder getting above-rate increases.

Not-for-profit Welsh Water has lowest rate of increase

Amongst the combined water and sewerage companies Thames Water 5.5% hike is the highest, while South West Water’s fall of 7.1% is attributable to a Government Contribution, which will reduce the bill for all households by £50 per year. Without the Government Contribution, South West Water’s combined average bill would be increasing by 2%, or around £10, to £549.

At 1.7% Welsh Water Dwr Cymru has announced the lowest average household bill increase across all water and sewerage companies in England and Wales. Welsh Water is a ‘not-for-profit company’ which has been owned by Glas Cymru since 2001 – with no shareholders and any financial surpluses reinvested in the business.

Of the water-only companies, Bristol Water has announced the largest increase of 6.1%.

Water UK, the organization which represents all the UK water and sewerage companies at national and international level, commented:

“We know that this is a difficult time for many customers and any increase will be unwelcome, but the investment programme that these rises will fund will deliver benefits to everyone.”

Water UK said the increase would ensure that customers could continue to rely on their water and sewerage services now and for decades into the future, at the same time making rivers and beaches cleaner, adding:

“Investment from water companies is also providing a crucial boost to local economies in all parts of the country. Regional water companies support thousands of local businesses and tens of thousands of jobs at all skill levels.”