Much of the cost of our water services goes to pay for collection and treatment of water to its very high standard for drinking. Our water and sewerage bills also pay for disposal of sewage, improvements to the supply network, reducing leakage, preventing sewer flooding and, not least, conserving the natural environment on which our water supply depends.
• Water and sewerage bills
• How water prices are set
• Customer representation
• Investment in water quality, infrastructure and resources
• Affordability
Around the country, prices vary between one water company and another. This is because the types of supply (reservoirs, underground sources, rivers etc), the quality of raw water, and geographical and environmental factors are different for each area. Therefore water and wastewater services have to be priced according to local conditions.
Most household customers pay for their water services based on the rateable value of their property. However, more than a third now have meters and are charged according to the amount of water they use.
- The proportion of metered customers is now around 40% and rising.
Each year the economic regulator for England and Wales, Ofwat, publishes detailed information for customers on the price of water, showing how much each water and wastewater supplier charges, how prices have changed and values for the costs associated with domestic consumption.
Typical costs for using water in the home
| Domestic use | Water cost | Litres used |
| Shower | 9p | 35-40 |
| Bath | 18p | 80 |
| Watering the garden | £1.23 | 540/hour |
| Flushing the toilet | 2p | 7.5-9.5 |
| Using a dishwasher | 5p | 20 |
| Source: Ofwat 2009 |
In England and Wales price limits are set for five-year periods by the independent economic regulator for water, Ofwat. Prices were set in 2009 for 2010-15.
In Scotland the Water Industry Commission for Scotland sets prices. In 2009 prices for 2010-14 were set.
In Northern Ireland's first price review, prices for 2010-13 (Price Control 2010 - PC10) were set by the Utility Regulator for Northern Ireland.
Prices go up only as much as the regulator thinks is absolutely necessary and water companies are expected to be very efficient in the way they operate – to deliver water services cost-effectively and to a very high standard. This is monitored and the economic regulator reports on progress annually.
In October 2005 an independent consumer organisation representing the interests of all customers in England and Wales, the Consumer Council for Water (CCWater), was established.
This water watchdog provides a strong national voice and regional representation for all consumers. CCWater is committed to ensuring customers get value for money, that problems are sorted out quickly and that water and wastewater services are of a high standard.
Customer representation in Scotland is through Scottish Public Services Ombudsman and in Northern Ireland, the Consumer Council.
Investment in water quality, infrastructure and resources
A proportion of the household water bill pays to support capital investment. This includes costs for essential work to maintain and improve water quality and the infrastructure and to develop resources to meet water demand in the UK that is growing year by year.
- Since 1990 (the date of the main industry privatisation) the industry has invested more than £90 billion in improving drinking water quality, the water environment and customer service. That is almost £3,500 for every household in England and Wales. Investment is now running at some £80 million a week.
The underground networks and above-ground installations of the English and Welsh water companies have a replacement cost today of around £250 billion, over £10,000 per connected property. There are over 335,000km of water mains and over 315,000km of sewers with a total value of over £200 billion.
At each price review, the regulator has to determine an appropriate cost of capital for the industry. This is the return to investors for providing the finance that is needed to pay for capital investment.
For most customers water and sewerage charges are a relatively small proportion of their income. However, the same may not be true for households on low fixed incomes.
The water industry is conscious of the impact rising bills may have on customers who can’t easily afford, or are already struggling to pay, their bills.
To help these customers, companies offer a range of measures, including: helplines, flexible payment plans, referrals to charitable trusts and hardship funds, free water meters and help in applying for direct payment from tax credits and other benefits. Water service suppliers also offer advice on special tariffs and point customers to debt advice agencies where appropriate.
Water companies are working with government departments and other agencies to address issues of non-payment among customers.
Price-setting: the regulatorsEngland & Wales
Ofwat
Scotland
Water Industry Commission
Northern Ireland
Utility Regulator
Prices & investment
Water industry finance and investment briefings
July 2009
• Overview
• Prioities and prices
• Why water services need so much investment
Consumer voice
Consumer Council for Water
National water watchdog representing water customers in England and Wales
Scottish Public Services Ombudsman
Consumer representation for Scottish Water customers
Consumer Council for Northern Ireland
Represents water customers
