Water watchdog warns of £13bn on bills

The water regulator Ofwat warned ministers yesterday that householders may not be prepared to foot the bill for environmental improvements which could add £13bn to domestic bills.

Philip Fletcher, the director general of Ofwat, told the Environment Secretary Margaret Beckett that the Government would have to make "hard choices" when it came to decide on the level of improvements to water quality.

Mrs Beckett is to give Mr Fletcher guidance early in the new year on the environmental programmes he should factor in to the next set of water company price controls, which take effect in 2005. Mr Fletcher said that based on draft business plans submitted by water companies, environmental and water quality improvements would add £7.1bn to £13.4bn to bills. Companies would need to invest the same amount again to maintain their assets, ensure security of supply and tackle problem areas such as sewer flooding.

The industry proposes to increase bills by an average of a third over the five-year period from 2005. Some suppliers such as United Utilities, the water company for the North-west, have put in for a 70 per cent rise.