Yorkshire Water and Northumbrian Water are two of four UK utility companies working together to provide a £21 billion package of network improvements over the next ten years in the North East of England.

The two water companies along with Northern Gas Networks and Northern Powergrid will invest more than £5.7 million a day between them.

The money will be spent on vital improvements to ensure water, electricity and gas networks are best placed to cope with the fresh challenges presented by climate change and population growth and affordability.

Population growth is expected to mean there will be more than a million more people living in Yorkshire and the North East by 2035.  At the same time, climate projections reinforce the picture of change and uncertainty with both droughts and floods occurring in 2012, and scientists predicting that these trends will continue with longer, hotter dry spells and more extreme weather events.

Chief Secretary to the Treasury Danny Alexander praised the companies for “helping us take steps towards recovery.”

An independent report by Leeds University and Edge Analytics into the economic value of water and energy assets to the North of England calculates that for every £100 of capital and operational expenditure by the four utilities, a further £93 is generated within the wider northern regional economy.

This means that the combined spending of £21 billion by the four utility companies – which cover nearly a fifth of all the land in England (24,000 sq km) and serve a population of eight million customers – could create over £40 billion of economic activity over the next ten years in Yorkshire and the North East.

Yorkshire Water has a rolling £1.9 billion investment programme for the period 2010-2015 to improve its water and sewerage network. £100 million is being spent on increasing the capacity of its sewer network through means such as the creation of underground storm tanks.

Northumbrian Water’s £875 million programme of investment between 2010 – 2015 to improve its water and sewerage network includes £120 million to reduce the risk of sewer flooding and a £70 million investment in Advanced Anaerobic Digestion, to convert sewage sludge into green energy.

Richard Flint, Chief Executive of Yorkshire Water, commented:

“As four of the biggest utilities in England, we don’t just pump water and energy into our regions; we also pump millions of pounds into the local economy.

“As major regional employers, we’ll be investing more than £5.7 million a day in our respective regions, improving our networks and ensuring our customers continue to receive the high quality service they’ve come to expect from us.

“This investment is all the more vital as we face into some of the major challenges of the day, including climate change, population growth and the issue of affordability.

“These place extra pressure on us to maintain reliable water and energy supplies and manage these resources more efficiently as we cope with shortages and excesses, whilst at the same time keeping bills as low as possible during these times of austerity.”

Maxine Mayhew, Commercial Director, Northumbrian Water Group, said:

“Against the backdrop of these tough economic times Northumbrian Water’s extensive investment programme is supporting hundreds of jobs and a significant number of contractor companies are engaged to help deliver improvements to ensure our customers receive an excellent service.

“We are investing £875m in our network between 2010 to 2015 which sustains local business and employment and more than 60% of our supply chain is based in the region.

“Infrastructure is the bedrock upon which economic activity depends. The calibre of our infrastructure will be a major factor in our ability to continue to contribute to rebalancing the economy and enable the North East and Yorkshire to fulfil its potential and deliver a stronger return for UK plc.”

Danny Alexander, Chief Secretary to the Treasury, commented:

“The Government is clear that investing in economic infrastructure such as water, gas and energy is vital to creating a stronger economy and a fairer society.

“The private sector has a major role to play in this and it’s encouraging to see these four major utility companies working together to support Yorkshire and the North East, potentially generating over £40 billion of growth in those areas over the next 10 years.”