Hosepipe Ban

Ofwat today confirmed that it has fined Severn Trent Water £35.8million for deliberately providing false information to Ofwat and for delivering poor service to its customers. This breaks down as: £34.7 million (2.9% of 2006-07 turnover) for deliberately misreporting some key customer service information; and £1.1 million (0.1% of 2005-06 turnover) for providing sub-standard services […]

Water companies would face targets to help customers save more than 23 million litres of water a day (Ml/d), under proposals published by Ofwat.

George Day, Ofwat’s Director of Network Regulation, said:

“We have to use water more carefully and cut waste if we are to continue to enjoy safe, reliable water supplies.

“The new approach to water efficiency targets we are proposing will be challenging for companies but help to reduce wasteful use of water. This should mean lower costs, lower customer bills and good news for the environment.”

The Consumer Council for Water has applauded Wessex Water for sharing the company’s success with its consumers by using a portion of their profits to invest in improved services.

The water watchdog recently wrote to each water company challenging them to think about consumers in their profit announcement so that consumers, not just shareholders, benefit from a successful year.

Wessex Water has risen to the challenge and over the next two years committed to spend an extra £14 million from their profits above and beyond what is required by the regulator, Ofwat. The investments will be used to further reduce leakage, provide greater security of supply, and reduce the risk of sewer flooding.

The Consumer Council for Water has welcomed Thames Water’s announcement that it intends to establish a £5 million charitable trust and spend a further £5 million on community related projects in London and the South East.

This is a positive first step in answering the Consumer Council for Water’s call to share more of the company’s profit success with its consumers.

The Consumer Council for Water today (Thursday 5 June) called for customers to share in the success of Thames Water’s 34% increase in profits.

Thames Water announced extremely good operational and financial results for 2007-08. The company is now more efficient leading to a reduction in operating costs. This has in turn led to an increase in operating profits to £590.1m from £439.1m. But with profits of this scale customers are bound to expect a share in this 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.

Ofwat today published the second part of its review of competition in the water and sewerage sectors. In it they recommend that contestable water and sewerage markets are opened to competition where it will benefit consumers, and they describe the work we will be doing to enable this to happen.

Ofwat Chief Executive Regina Finn said:

“We want to achieve an efficient and innovative sector which is able to respond to the challenges facing it, such as climate change, rising consumer expectations and growing population in water-scarce areas. Competition can help deliver that.

Ofwat today has fined Thames Water 0.7% of turnover (£9.7 million) for misreporting information and delivering poor service to customers.

Ofwat is now publishing final notices penalising the company, after proposing to fine the company last September. Deficient systems and low business priority on reporting non-financial data led to the company misreporting customer service information. This damaged the regulatory process.

Ofwat today published its proposals to fine Severn Trent Water 3% of its turnover – a total of £35.8 million – for deliberately providing false information to the regulator and providing a poor service to its customers.

Ofwat’s proposed fine on Severn Trent Water breaks down as follows:

* 2.9% of 2006-07 turnover (£34.7 million) for deliberately misreporting some key customer service information; and

* 0.1% of 2005-06 turnover (£1.1 million) for providing sub-standard services to customers in 2005-06 by failing to meet Guaranteed Standards of Service.

GMB, the water workers union, plan to step up a campaign to secure a new ownership structure for the UK water industry that would lead to better value for consumers and open the way to develop new water supplies for London and the South East.

This coincides with a warning sounded by the Paris-based Organisation for Economic Co-Operation and Development (OECD), which produced a map showing hot-spots where the water available to each person was likely to be at a premium. There are fears that within 20 years a parched zone will spread across the country from the Bristol Channel to the Norfolk coast and north of the Midlands.

The independent review of competition and innovation in the water industry, announced when the Government launched its new Water Strategy for England earlier this month, is to be led by Professor Martin Cave.

Confirming the appointment today in a speech to the Water UK City conference, Secretary of State Hilary Benn also published the review’s terms of reference.

To protect essential water and sewerage services for consumers and safeguard the future of those services, bills in England and Wales will rise by a little more than inflation this year.

The average increase, which will vary from company to company, is 1.5% plus inflation at 4.3%. This means that the average household water and sewerage bill will rise by around £18 to £330 a year.

Ofwat today confirmed that it has fined Southern Water a total of £20.3 million for deliberately misreporting information and delivering poor service to customers.

Southern Water’s shareholders will bear the entire cost of this fine. It will not be passed on to its customers.