THE WATER industry in the UK is in a mess – and no one wants to pay to clean it up. At the moment, the regulator, Ofwat, which is supposed to protect consumers from the worst ravages of private water companies, is suggesting that consumers should foot the bill.
Water companies have to apply to Ofwat for approval of their budgets, including prices, every five years. This year, they have applied to put up prices over the coming ycars by £3.4 billion. Roughly a third of that has been requested to keep basic water supplies going. The balance has been requested to meet increased demand and to deal with pollution and harm to the environment. The increased charges would be on top of the increased charges the water companies negotiated with Ofwat in 2024.
Ofwat tried to placate bill-payers – to pour oil on its troubled waters, as it were. It claimed that if water companies could spend more, they would do a better job. It said it would monitor their performance and if the companies did not deliver, Ofwat could claw back their expenditure (whatever that means).
Ofwat also revealed that the water companies had in fact asked for permission to increase its income from consumers by £4.3 billion – as if agreeing to just £3.4 billion showed what a good job Ofwat was doing.
Prime Minister Andy Burnham has expressed disappointment with the proposed increase, coming at a time when people are struggling with the cost of living. He said that he understood consumers’ anger at the ever-increasing charges and hinted that there were limits on how much consumers would be able to pay. He said that water companies tried to make consumers pay for “unnecessary” costs, the companies would be challenged. He did not say how they would be challenged, or whether they would be challenged for charging for necessary costs.
It was Tory Prime Minister Margaret Thatcher who privatised water – claiming that giving the service to private companies would see new investment flooding in. What actually happened was that money flooded out – as companies paid dividends to their shareholders. It is now down to Andy Burnham to find a way – and the money – to get the UK out of this mess.
The Ofwat proposals are now out for public consultation until 24th September. Although this is referred to as a “public consultation”, it seems to be geared to companies responding, rather than consumers. Readers are advised to click the link below and oppose the increases. You may also wish to write to your MP.
●Public consultation: Consultation on higher charges
●Read more about it: Thames Water chucks your money at senior officer Thames Water issues hosepipe ban