Water watchdog to investigate plans for bill rises

Water companies have proposed inflation-busting price hikes to customer bills within seven years, prompting the industry watchdog to investigate the plans.

The water companies handed Ofwat a dossier in August, detailing the plans for investment in infrastructure, as they look to secure sustainable water and sewerage services between 2010 and 2015.

The companies hope to fund part of the development by raising customer bills across the country. The regulator said bills would increase by 9 per cent more than inflation, by 2015. It added that this would be £355 before inflation is considered.

Ofwat announced today it was analysing and challenging the companies' proposals. Following the talks, water companies will submit final plans in April. Ofwat will then set the price limits in November 2009.

Regina Finn, Ofwat chief executive said there was a need to balance investment in the future with what the customers are paying. “We will analyse the water companies' proposals rigorously and challenge them to justify all investment. We will protect customers from any unnecessary price rises,” she added.