Annual water bills will increase by £33 to pay for clean-up supply

Water bills are to shoot up by nearly 8 per cent next year, the sector's regulator announced yesterday. The money will fund a £16bn investment programme aimed in part at cleaning up the water supply.

Water bills are to shoot up by nearly 8 per cent next year, the sector's regulator announced yesterday. The money will fund a £16bn investment programme aimed in part at cleaning up the water supply.

During the five-year period from next year, bills will rise by an average of £33 or 13 per cent across the country to take the typical bill to £282 by 2009. However, much of the increase will be taken in the first year. The biggest rise will see customers of Wessex Water paying an extra 20 per cent (£55) over five years.

The five-year increase was half that sought by the water companies and the regulator's "draft determination" was broadly welcomed by consumer groups and environmental campaigners. Bills were kept down because Ofwat sanctioned only £16bn of the £21bn expenditure sought by the water companies.

The Environment Agency said it was concerned Ofwat had not included many projects it considered essential. The environmental body also said Ofwat's proposals did not address the problem of London's sewerage system, which empties into the Thames when it is flooded - as happened after storms this week. Andrew Skinner, the Environment Agency's director of environmental protection, said these omissions meant that Britain could fall foul of European directives on issues such water quality.

Ofwat's proposals are subject to final consultation and it will receive ministerial guidance. Mr Skinner said ministers had to insist the London sewer improvement scheme, which will cost about £2bn, be included in the final plan, which will be published in December.

Thames Water said that the regulator had sanctioned £2.7bn of the £4bn investment programme it had put forward. John Sexton, managing director of Thames Water: "This week's storms emphasise the challenge we face, and we are sure customers whose properties are at risk of sewer flooding will be very disappointed." Ofwat said it had included 94 per cent of the schemes put forward by companies to enhance the environment and quality of drinking water. Work on sewer flooding would help 80 per cent of homes affected nationally, it said.

The consumer watchdog WaterVoice said the regulator's plans were "better than expected". It added the Government had to tackle the problem of affordability for those customers who were on a low income.