Water firms told: Plug your leaks... and cut bills by £50

WATeR firms have been ordered to cut annual bills by an average of £50 and spend billions on tackling leaks in a crackdown by industry regulator Ofwat.

The move follows Government concerns that executives and shareholders – many foreign based – have cashed in from an industry that became a licence to print money.

Ofwat yesterday published its price controls for the biggest water and sewerage firms for england and Wales from 2020 to 2025.

It said that there will be an average fall in annual bills of £50 – or 12 per cent – before inflation, over the five years coupled with a requirement to spend £51billion on the ageing mains pipes and sewer network.

The actual size of the fall will depend on the company and how much families pay at the moment.

The highest bills are in the South West of england. The average of £527 a year is predicted to fall by £105 – 20 per cent – to £422 by 2025, before taking inflation into account.

The average annual bill for Northumbrian Water is currently £429, but this will come down by £110 – 26 per cent – to £319. Thames Water is the UK’s biggest supplier and has come under fire for missing leak reduction targets and leaving thousands of families without water during the great freeze of 2018. Its average bill of £389 will come down by just £28 – 7 per cent – a year by 2025 to £361.

Ofwat has demanded that leaks are cut by 16 per cent a year to improve efficiency, as part of a £6billion cost-cutting exercise.

Its package also includes £13billion earmarked for ‘new and improved services that go above and beyond water companies’ day-to-day operations’ including £1billion on cutting the impact of flooding.

Ofwat chief executive Rachel Fletcher said: ‘Water companies need to… transform their performance for everyone.’

But water company sources have indicated they may take legal action to challenge the price controls.

Christine McGourty, chief executive of trade body Water UK, said: ‘Companies will take time to work through all the details as they consider the implications of this tough price review for the years ahead.’