Use of National Averages
43. Under the water companies' draft proposals the
average household bill would increase from £234 in 2004-05
to £306 by 2009-10. The proposed final bill for 2009-10 varies
between £239 for Thames Water to £407 for South West
Water and £416 for United Utilities. The average proposed
increase in bills as a result of the cost of environmental improvements
in water companies' preferred plans was £26, but this varied
from £3 for Thames Water to £90 for United Utilities.
For all water-only companies, which do not carry out any sewage
treatment, this was on average in the region of £1.
44. Given the large variation in the proposals put
forward by water companies, the very different circumstances in
which they operate, and the difference that already exists across
the country in the level of bills to household customers it is
questionable whether the production of a table of "average"
proposed increases by water companies in England and Wales, as
included in Ofwat's summary of companies' draft business plans,
actually adds anything constructive to the debate, particularly
when there are such enormous differences between the figures put
forward by different companies. [53]
These regional figures are already produced by Ofwat and, given
that there are only 10 water and sewerage companies and 12 water-only
companies, the information is not unduly complex. The emphasis
of the Review and the Regulator's analysis should be on what the
proposed new price limits will mean to customers in individual
water company regions not on a national average price rise, which
gives little indication to customers of the likely changes to
their water bills.
45. There are several areas that have come to the
attention of the Committee where very limited information is made
generally available. For example, the yearly figures produced
by Ofwat on the levels of customer debt includes general information
in which companies are not specifically identified, so customers
have no way of knowing how much debt they are subsidising in their
area, even though these figures are made available to Ofwat by
water companies. Another example is the cost of diffuse pollution
to customers, which is given as £7 per customer per year
by Ofwat, however other than this there appears to be little information
available on how this varies from one region to another and the
costs to customers in individual regions.
46. This use of average figures for reporting on
many water companies' activities is unhelpful when trying to
determine the regional variations in impacts on customer's bills.
Whilst we understand the reason for this is often commercial confidentiality,
or even a lack of basic information, it is our view that this
conflicts directly with the right of customers to understand what
they are paying for in their bills. The Regulator, as part
of his duty to protect customer's interests, must ensure that
more substantive information, where it exists such as is the case
with levels of customer debt, is made available to customers in
an accessible manner which makes clear the costs incurred in their
own water region. Where this information does not already exist,
as in the case of diffuse pollution, more effort should be made
to obtain it and make it publicly available.
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