News
Water Industry Breaking News – Water companies pocket savings and customers do not get “Value for Money”
Water Industry Breaking News – Water companies pocket savings and customers do not get “Value for Money”
An official government spending watchdog reveals water companies retained substantial unexpected savings due to low interest rates and taxes after the financial crisis. The report via the National Audit Office accused the water companies with regional monopolies of retaining some £800 million and just a staggering one third was utilised to lower prices for customers.
Yesterday MP’s supported a call for the water companies to reduce water bills to assist millions of customers.
The chair of the Public Account Committee Meg Hillier said “Water is a basic human necessity and most tax payers are unable to choose their water supplier” Although the regulator OFWAT set price limits which should reduce water bills by £20 over the course of the next 5 years in real terms Mrs Hillier said “More work was clearly needed to ensure customers share in the savings made”
The latest analysis by the National Audit Office discovered service quality had in fact improved “Markedly” during the last 26 years including water quality and bathing water.
No doubt water companies have benefited from efforts to stimulate Britain’s economy, they have gained £410 million derived from reductions in corporation taxes and a further £840 million from lower than expected interest rates. The report found the water companies passed on water bill discounts of £435 million leaving £800 million additional profits.
The CEO of OFWAT said she was “surprised by a suggestion that customers received poor value for money as price caps shielded households from significant water bill increases” had interest rates increased. Recommendations from the regulators price review means that by 2020 water bills will be £3 billion lower than water companies planned.
A water audit experts view – One wonders if the report released by the National Audit Office is politically motivated? They would do best if a root and branch investigation was undertaken on the substantial water company overcharges which for decades have plagued the water industry and some of the water bill charging structures that enable water companies to retain overcharges and not refund customers. The current legislation approved by OFWAT leaves customers powerless to pursue water companies to repay overcharges in full, the only recourse left to customers is the Consumer Council for Water which have no authority over the water companies whatsoever.
Water company overcharges range from £100 to in some cases £500,000 on individual or multiple commercial sites. Paying for water company overcharges is rife in the UK and Scottish Water industries.