United Utilities and Severn Trent have laid out plans to slash bills for millions of households and reduce leaks, while South West Water has pledged to offer customers a stake in its business.
The five-year business plans submitted to water industry regulator Ofwat come as water companies face fierce criticism for providing poor service while paying billions of pounds in dividends to shareholders.
United Utilities said it would cut average bills by 10.5 per cent in real terms between 2020 and 2025 – a reduction of £45 per customer.
United said it will spend £750m to make its water supplies more resilient for customers in Manchester and across the Pennines. The investment will reduce leaks by 15 per cent by 2025, the company said.
All water companies are required to deliver a business plan every five years laying out how they will serve customers.
United Utilities boss Steve Mogford said: “We are cutting bills such that they will be lower in real terms in 2025 than they were 15 years ago, whilst also delivering higher standards of service, increasing resilience, delivering innovation and investing for the long term.”
Severn Trent said it would cut average bills by 5 per cent in real terms by making its expenditure more efficient. It also proposed paying 1 per cent of its profits annually to support local communities.
Thames Water said bills would remain flat but it plans to invest £11.7bn to upgrade its infrastructure, including £2.1bn to prevent leaks. In June, the company was ordered to pay £120m to compensate customers over leaks.
South West Water promised below-inflation rises and said it would offer 800,000 households shares in the business, making it the first water company to return to a form of public ownership since the industry was privatised.
Ofwat senior director John Russell said: “We’ve reached a key milestone in our price-review process.
“From now until January 2019, we’ll pore over each and every business plan and we’ll be looking for evidence that they are robust, ambitious and, crucially, that they have been shaped by customers.
“All companies have had an opportunity to develop high-quality plans, but where plans aren’t sufficiently ambitious or stretching, we’ll step in to protect customers and the environment.”
