Customers should benefit from Water Companies’ success

Water and sewerage companies in England and Wales will soon be announcing profit figures for 2007/8 but consumers, as well as shareholders, should share in their success, says the Consumer Council for Water.

The water watchdog has written to all water and sewerage companies calling for them to return value to consumers, either by keeping price increases to inflation levels or below, or providing extra investment in pipes, sewers and treatment works that will provide future consumer benefits.

Water and sewerage companies in England and Wales will soon be announcing profit figures for 2007/8 but consumers, as well as shareholders, should share in their success, says the Consumer Council for Water.

The water watchdog has written to all water and sewerage companies calling for them to return value to consumers, either by keeping price increases to inflation levels or below, or providing extra investment in pipes, sewers and treatment works that will provide future consumer benefits.

Last year three water companies responded positively to the Consumer Council for Water’s call. Northumbrian Water announced it would limit bill rises to inflation levels for two years saving customers an estimated £22 million, while Anglian Water and Yorkshire Water provided extra investment in the water and sewerage network, valued at around £48 million and £20 million respectively. In addition, Dwr Cymru/Welsh Water continued to make its £20 annual ‘dividend’ to all its customers. The Consumer Council for Water applauds all four companies for this.

Although Consumer Council for Water research says that the majority of consumers are satisfied with the service they get from their companies, many are increasingly distrustful of the industry and concerned about what they pay. So, as well as providing additional benefits, water companies must also work harder to tell consumers what they are getting for their money.

Following bill rises of 44% in real terms since privatisation and negative coverage around leakage, floods and fines, all companies need to really communicate well with customers to tell them what they are getting for their water bills.

Dame Yve Buckland, Chair of the Consumer Council for Water, said: “Profits are good and necessary. They help fund the improvements in pipes, sewers and treatment works that ensure a safe and reliable water supply and an efficient sewerage service that consumers value highly. By 2010 companies will have invested almost £70 billion on behalf of consumers and delivered major improvements to our water and sewerage networks.

“However, we know that the industry did very well from the 2004 price review, as there was a rapid rise in the value of companies and that, for the first time since privatisation, no water companies appealed against the price limits set by Ofwat.

“Because of this, the Consumer Council for Water is calling for water companies to give more back in consumer benefits this year, and not just share their success with shareholders.

“Looking forward, we are pressing all involved in the water industry to place consumers at the heart of the next water price review, which will be decided in November 2009. In particular Ofwat should listen to consumers, take note of what they are saying, and set prices and service improvements to reflect what consumers want and will find acceptable.”

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