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Postcode lottery claim over water bills

PUBLISHED: 09:52 27 November 2009 | UPDATED: 15:46 03 July 2010

Water regulator Ofwat's ruling on bills over the next five years has been branded a "postcode lottery" by one Norfolk MP.

While the national picture will see bills falling an average £3 before inflation by 2015, families around Great Yarmouth and in Suffolk who pay Essex and Suffolk Water for their water will see their bill actually rise on average by £21.

Water regulator Ofwat's ruling on bills over the next five years has been branded a “postcode lottery” by one Norfolk MP.

While the national picture will see bills falling an average £3 before inflation by 2015, families around Great Yarmouth and in Suffolk who pay Essex and Suffolk Water for their water will see their bill actually rise on average by £21.

While that will be partially offset by a £14 reduction in the bill they pay Anglian Water for sewage disposal, these 760,000 customers will still be major losers compared to the two million householders who pay Anglian Water for water and sewage, whose total bill will drop by an average £28.

Yarmouth MP Tony Wright said: “This shows up the inequality in the system of having different water companies. I think everyone should pay a standard charge across the board. I am pleased for Anglian Water customers but we are going to be hit by this postcode lottery on water charges.”

Meanwhile, Anglian Water's chief executive Jonson Cox described Ofwat's ruling - meaning customers bills will drop to an average £361 by 2015 - as a “harsh determination”.

The company had been lobbying for a £11 increase over the same period and has now been told by Ofwat it will have to cut its proposed investment programme from £2.26bn to £2.12bn.

Mr Cox said: “No one should be under any illusion that we will have to make significant cost cuts and efficiency improvements to meet the tough financial targets we have been given.

“The business plan we put forward struck the right balance between keeping bills down, being able to invest in essential infrastructure and in securing water supplies against the impact of climate change.”

The average £21 bill rise facing Essex and Suffolk Water customers, taking their bill to £190, is still £17 lower than the company was seeking, in light of its massive investment programme to increase the capacity of its Abberton reservoir in Essex.

Managing director John Cuthbert said the board would have to consider the detail carefully before reaching a conclusion on the final determination.

Ofwat's final decision on prices for 2010-15 is less generous to consumers than the average £14 before inflation cut first proposed in July.

But it said its decision would see average prices nationally around £34 or 10pc lower than under the plans submitted to the regulator by water companies earlier this year.

The regulator's chief executive Regina Finn said: "Customers have told us that they want us to keep water and sewage charges flat while maintaining a safe, reliable supply of water. That's what we've delivered.

“There's more to this than just low bills, it's about what customers get for their money. We've scrutinised every pound in the companies' plans to make sure they deliver what customers want."

Picking through the detail, the water watchdog, the Consumer Council for Water, gave an initial welcome to Ofwat's determination, saying Anglian Water customers would, in general, welcome the announcement.

However, Mick Rix, national officer of the GMB union, warned of job losses and further "turmoil” in the water industry.

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