Water companies are expected to come under fire this week when they report annual profits of nearly £2 billion after imposing above-inflation rises in water bills.
Figures to be published this week by the leading water and sewerage companies will show that all achieved healthy increases in profits.
It will renew accusations that Ofwat has allowed firms to put shareholders’ interests ahead of the needs of customers. The water industry regulator announced in 2005 that the companies could increase prices by more than the rate of inflation on condition that they undertook large-scale investment, such as mending leaking pipes.
However, customer complaints are running at all-time highs, while leakage rates are not improving substantially.
People on low incomes will struggle to keep up with upcoming water rate hikes, a consumer group has warned.
Households across England and Wales face average bill increases of £20 per year when new rates come into force on Sunday.
But the Consumer Council for Water warned that some customers would be harder hit than others.
The average 7% increase masks regional variations in price rises from the different water companies.
Water bills are to go up by seven per cent in England and Wales next year, more than twice the rate of inflation, the regulator Ofwat confirmed yesterday.
Average household water bills
The charges, which come into force next month, mean the typical household bill for water and sewerage will rise by £20 to £312. The Consumer Price Index, the Government’s preferred measure of inflation, is 2.7 per cent.
Consumer groups said many people would “fail to understand” how water companies could put up prices when they are making huge profits and after a year of water restrictions and customer service failures.
Some of the water suppliers imposing inflation-busting increases in bills have some of the worst records for leaks.