They might have to cut bills, but water firms should still count their blessings

The regulator says they can ‘do better’ – and they can, writes James Moore

The chill is coming to the water industry after its dismal performance during the Beast from the East cold snap (Getty)

From the point of view of the water companies, it could have been worse. ​OfWat’s long-awaited final determination on customers’ bills, investment returns allowed and investment required has confirmed a demand that the industry reduce what people pay for their water by an average of £50 over five years.

In that, it is broadly similar to what was first outlined in July. In the intervening period, the watchdog has squeezed the allowed return on capital a little bit more than in its first proposal, and made some allowances for individual companies based on the evidence in their submissions.

As well as the bill reductions, the price review confirms a £51bn investment programme. Water companies will also be required to cut leaks by 16 per cent. There are incentives for those that comply, penalties for those that don’t.