Letter: Water bills did not overcharge

ROSIE WATERHOUSE accuses the privatised water companies of 'secretly overcharging customers by pounds 280m' (17 April). This is not true on a number of counts.

Bills have risen by the amount necessary to fund a total capital expenditure programme spread over 10 years, which includes improvements in quality and refurbishment and renovation of assets.

The government, in setting price limits to finance the companies' expenditure programmes, thought that it was sensible to concentrate on improving quality in the short term and to build up a liability in the accounts to renew pipes and sewers when the expenditure on quality improvement was expected to fall. If companies had been required to spend more in the early years then bills would have been even higher.

This liability in the accounts does not represent an 'underspend' as Rosie Waterhouse seems to think. In fact, companies have actually spent pounds 136m more than they planned to spend to the end of March 1993.

Many companies have been able to achieve their programmes more cheaply than expected. Where this has been the case I have reduced their charging limits.

Nor is there any secrecy involving these figures. The anticipated five-year totals for each company's capital investment programmes were published in the prospectuses. Their detailed year-by-year plans for the future were not published but Ofwat reports each year on the industry's spending and achievements against forecast for that financial year. Details of individual company spending is given in the company's regulatory accounts, copies of which are available from Ofwat.

I am currently reviewing water company price limits from 1995-2005 and will be taking account of the amount that companies have spent on maintaining pipes and sewers up to 1995.

I C R Byatt

Director-General

Ofwat

Birmingham

Suggested Topics
Have you tried new the Independent Digital Edition apps?
Life and Style
ebookNow available in paperback
ebooks
ebookA delicious collection of 50 meaty main courses
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

SPONSORED FEATURES

ES Rentals

    iJobs Job Widget
    iJobs General

    Recruitment Genius: Interactive / Mobile Developer

    £40000 - £45000 per annum: Recruitment Genius: This digital production agency ...

    Recruitment Genius: PHP Developer - Midweight

    £40000 - £45000 per annum: Recruitment Genius: This digital production agency ...

    Recruitment Genius: Junior Front End Developer

    £20000 - £30000 per annum: Recruitment Genius: This digital production agency ...

    Recruitment Genius: Front End Developer - Midweight / Senior

    £35000 - £40000 per annum: Recruitment Genius: This digital production agency ...

    Day In a Page

    Giants Club: After wholesale butchery of Idi Amin's regime, Uganda’s giants flourish once again

    Uganda's giants are flourishing once again

    After the wholesale butchery of Idi Amin's regime, elephant populations are finally recovering
    The London: After 350 years, the riddle of Britain's exploding fleet is finally solved

    After 350 years, the riddle of Britain's exploding fleet is finally solved

    Archaeologists will recover a crucial item from the wreck of the London which could help shed more light on what happened in the vessel's final seconds
    Airbus has patented a jet that could fly from London to New York in one hour

    Airbus has patented a jet that could fly from London to New York in one hour

    The invention involves turbojets and ramjets - a type of jet engine - and a rocket motor
    Tate Sensorium: New exhibition at Tate Britain invites art lovers to taste, smell and hear art

    Tate Sensorium

    New exhibition at Tate Britain invites art lovers to taste, smell and hear art
    10 best sun creams for kids

    10 best sun creams for kids

    Protect delicate and sensitive skin with products specially formulated for little ones
    Ashes 2015: Nice guy Steven Finn is making up for lost time – and quickly

    Nice guy Finn is making up for lost time – and quickly

    He was man-of-the-match in the third Test following his recall to the England side
    Ashes 2015: Remember Ashton Agar? The No 11 that nearly toppled England

    Remember Ashton Agar?

    The No 11 that nearly toppled England
    Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

    US betrayal of old ally brings limited reward

    Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
    VIPs gather for opening of second Suez Canal - but doubts linger over security

    'A gift from Egypt to the rest of the world'

    VIPs gather for opening of second Suez Canal - but is it really needed?
    Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

    Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

    Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
    The male menopause and intimations of mortality

    Aches, pains and an inkling of mortality

    So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
    Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

    'How can I possibly be on the list with these writers I have idolised?'

    Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
    Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

    Bettany Hughes interview

    The historian on how Socrates would have solved Greece's problems
    Art of the state: Pyongyang propaganda posters to be exhibited in China

    Art of the state

    Pyongyang propaganda posters to be exhibited in China
    Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

    Vegetarian food gets a makeover

    Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks