Asked by: Mark Tami (Labour - Alyn and Deeside)
Question to the Department for Environment, Food and Rural Affairs:
To ask the Secretary of State for Environment, Food and Rural Affairs, what assessment he has made of how the recommendations of the HM Treasury report entitled Smoothing Investment Cycles in the Water Sector, published in July 2012, have affected the water sector.
Answered by Dan Rogerson
Ofwat worked closely with HM Treasury and Infrastructure UK on the Smoothing Investment Cycles in the Water Sector report. In response to the recommendations of that report, Ofwat has continued to work with water companies and Infrastructure UK on action to address the up and down ‘cyclical investment' that has affected the sector for many years.
This change in approach has had tangible outcomes. For example, in responding to incentives that Ofwat introduced in its methodology for the price review, water companies have stated in their business plans (December 2013) that they are bringing forward around £440 million of investment into 2014-15 to smooth the investment profile. This investment will improve the delivery of service outcomes to customers, support the supply chain and enable efficient delivery.
Asked by: Mark Tami (Labour - Alyn and Deeside)
Question to the Department for Environment, Food and Rural Affairs:
To ask the Secretary of State for Environment, Food and Rural Affairs, what percentage change there has been in the average cost of a water bill in each year since 2011.
Answered by Dan Rogerson
Water prices in England and Wales are reviewed by the independent economic regulator Ofwat every five years. Water prices for the 2010 to 2015 period were set in Ofwat's 2009 water price review.
The percentage change in the average cost (in real prices) of a combined water and sewerage bill in England and Wales during the 2010-2015 period is as follows: -0.6% (2010/11), 0.2% (2011/12), -0.1% (2012/13). The forecast for 2013/14 is 0.5% and for 2014/15 around 2%. The changes year on year usually relate to the profile of water industry investment agreed in the 2009 price review. For 2014/15, water companies are taking steps to hold customer bills down and in some cases are giving up price increases that were allowed for in 2009.
Ofwat's 2014 water price review is now underway and will determine water prices for the 2015 to 2020 period. Most water companies are proposing flat or declining bills from 2015.
Asked by: Mark Tami (Labour - Alyn and Deeside)
Question to the Department for Environment, Food and Rural Affairs:
To ask the Secretary of State for Environment, Food and Rural Affairs, what recent discussions he has had with representatives of the water industry to discuss the cost of water bills.
Answered by Dan Rogerson
The Secretary of State discussed the cost of water bills when he met water industry representatives in July 2013. He emphasised the need to secure the best deal possible for customers while continuing to attract essential investment in the long-term resilience of the sector. He sent a follow up letter in November 2013.
As the independent economic regulator for the water industry, Ofwat reviews water prices every five years. Securing a fair balance between the needs of water companies and their customers is central to Ofwat's approach to the price review.
Water companies have now submitted their business plans to Ofwat to inform the 2014 price review. The plans set out how they intend to meet their obligations to customers and the environment during the 2015 to 2020 period. Most water companies are proposing flat or declining bills from 2015.
Water UK has also announced that most water companies will be holding bills below the rate of inflation in 2014/15, the final year of the price and investment package agreed in 2009.