Industry regulator Ofwat has issued a warning that customers will pay more on water bills, while investors could see higher dividend payouts if the Competition and Markets Authority’s (CMA’s) package of proposals regarding the price review of four water companies are confirmed.
In December 2019, Ofwat set out what water companies should be delivering for both customers and the environment, and the prices that customers will pay over the coming five years – demanding big improvements from suppliers at the same time, with the majority accepting the challenge and working towards achieving their goals.
However, Anglian Water, Bristol Water, Northumbrian Water and Yorkshire Water referred the watchdog’s decisions to the CMA, which recently set out its provisional findings for consultation.
Some areas of the consultation were identified as leaving customers worse off, such as the proposal of higher bills. This isn’t focused on paying for environmental protection or for better services, but instead the extra money could potentially go straight to investors, with the proposals increasing their returns by around 20 per cent.
Rachel Fletcher, chief executive of Ofwat, said: “While the CMA agrees in principle with the need to challenge the water sector and for companies to up their game, its Provisional Findings risk having the opposite effect. It could see customers paying more, service stagnating and the scales tipped in investors’ favour.
“These proposals risk incentivising companies to look for easy, short-term financial returns, rather than what they should be doing – delivering better services to customers and the environment over the long term.”
She went on to say that Ofwat will continue to work in customers’ best interests and is keen to work with the CMA to understand their perspective. The organisation is optimistic that if the CMA does give itself sufficient time to work it through, an outcome can be delivered for customers, Ms Fletcher concluded.
Businesses concerned about this may want to look into bill validation at this time, so that you can find out exactly what your water supplier is charging you for. Commercial water bills can be complex and the more water your business uses, particularly across numerous different processes and multiple sites, the more complex they then become.
Charges can be obscure or hidden, which makes it very difficult for you to follow whether you’re being billed accurately or fairly. But validation can help to remove this complexity so you can see at a glance what you’re actually paying for.
A consultancy service like H2o Building Services can spot mistakes and discrepancies quickly and easily, helping to save you thousands of pounds in reduced costs and refunds.