MPs: Poor oversight by Ofwat has lead to higher water bills
13/01/2015
A committee of MPs have claimed that poor oversight by regulator Ofwat has lead to millions of families paying too much for their water.
A report completed by the Public Accounts Committee (PAC) revealed that the water regulator, Ofwat, regularly overestimated water companies’ taxing and financing costs when they were setting price caps.
The PAC is now asking the regulator to review the way it assesses water companies’ costs of debt and tax and seek out areas for improvement.
The MPs also raised concerns about customers in certain parts of the UK where water is scarce having to pay to help develop new capacities, despite the fact that water trading between companies may be implemented in the near future.
The UK’s water companies made windfall gains of at least £1.2 billion between them last year, while household water bills averaged just under £400.
PAC chairwoman Meg Hillier said:
"Ofwat was set up to protect the interests of customers, most of whom have no choice over who supplies their water yet must pay bills typically running to hundreds of pounds.
"Many householders will therefore be appalled to learn these bills could have been smaller had Ofwat adopted a different approach to setting price limits for water companies.
"This approach must be reviewed as a priority.”
Ofwat said that it would “carefully consider” the PACs report. Ofwat chief executive Cathryn Ross said:
"Holding companies to account and protecting customers is at the heart of what we do.
"That's why we've made sure bills will fall by 5% by 2020. We will carefully consider the thoughts of the PAC."
Need Financial Advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
British Gas hit with £11.1 million fine
04/12/2014 British Gas has been fined £11.1 million by regulators Ofgem for failing to meet energy efficient targets on time. The energy supplier failed to meet deadlines to insulate homes under two energy efficient schemes that ran till the end of 2012. Although British Gas did manage to meet its targets, it missed the deadline meaning thousands of homes were left without insulation durin...
Read MoreIs the Royal Mail being primed for a sell-off?
News that first-class stamps in UK will rise by 3p to 39p from April 2009, which is roughly twice the rate of inflation, is seen by many as further evidence that the Royal Mail will soon be sold off by the government. This latest rise comes on the back of potentially tens of thousands of job cuts, a partial sell-off to Dutch group TNT and concern about the state of the company's pension fund. Ther...
Read MoreHousehold Bills rise at four times the rate of Earnings
The cost of living has risen at four times the rate of incomes since the start of the economic downturn according to the Office for National Statistics (ONS). This means that those who either rent or own a home, and pay bills for amenities, are significantly worse-off than they were before the recession started in 2008. Over the last five years, household bills have risen by an average of 25pc,...
Read MoreWill you be changing your spending habits?
Now that the UK government's emergency budget is out of the way we can start to see how these changes will impact upon the everyday life of people in the UK. Despite the fact that many of us may not intentionally change our spending habits there is no doubt that such basic changes as an increase in VAT will mean less money in our pockets. So will you be changing your spending habits? The truth...
Read MoreIs this really the time to be testing out green cars on the UK roads?
The economy is on its knees, consumers cannot even afford to put on their heating and the government is still pushing ahead with crazy and expensive schemes to test green cars in the UK. The average UK citizen is struggling to run their car at the moment never mind being able to take on the added expense of a green car - no matter what the long term savings.
Quite why the authoriti...