Household Water Bills To Rise By 3.5%

The average household water and sewerage bill in England and Wales is set to increase by 3.5%, regulator Ofwat has said.

From April the average cost of a water and sewerage bill will rise to £388 - 0.5% above the rate of inflation.

Residents in southeast England face the biggest increase of £23 a year.

Customers are helping to pay for a £25bn programme to improve the water supply.

Since the industry was privatised in 1989, water companies have spent £108bn on upgrade work.

There are many areas where water companies say they will use the extra money. One way is by tackling the amount of wastewater that seeps into our waterways.

In London, every time there is heavy rain raw sewage finds its way into the Thames. 

Thames Water spokesman Simon Evans told Sky News: "What we spend on the system for our customers dwarfs the amount we pay out to shareholders.

"Our customers have a safe reliable service - so too our shareholders, most of whom are actually pension funds, expect safe, reliable returns on their investment.

"We know household budgets are squeezed at the moment but there is essential work to do to improve the infrastructure."

Ofwat chief executive Regina Finn said: "Back in 2009, companies wanted bills rises of 10% above inflation.

"That didn't chime with what customers told us they wanted, so we said they could only increase bills in line with inflation.

"We understand that there is huge pressure on household incomes, and any rise is unwelcome. Inflation is driving these increases."

Ms Finn said the regulator will ensure companies keep their promises on investments.

"We will make sure customers get value for money and if companies fall short in delivering their investment promises, we will take action," she said.

"In the past seven years, we have made companies pay out around £550m where they have under performed."

The new charges will vary for households depending on their supplier and whether they have a water meter, Ofwat said.