YOUR UK WATER BILL : WHO DECIDES WHAT YOU PAY
January 13, 2016 / Glen Reynolds
How our bills are decided
Q | Who sets what we pay in water bills?
A | Because Britain’s privatised water industry is an effective monopoly and nobody has a choice over who provides their water and sewage services, all price rises have to be approved by the regulator, Ofwat. Annual price rises or cuts are usually set every five years so that companies can plan long-term investment decisions with certainty.
Q | So what has the Public Accounts Committee found?
A | Parliament’s spending watchdog claims that, over the last five-year period, the water companies have charged us over £1.2bn more than they should have done – and Ofwat has let it happen.
Q | How could they do this?
A | Ofwat made assumptions about the cost of borrowing, levels of taxation and other costs facing the industry, which turned out to be inaccurate. As a result of the assumptions, the companies were far more in profit than they were meant to be.
Q | So consumers will get this money back now, right?
A | Wrong. Ofwat has no power to claw the money back by lowering future bills.
CREDIT: http://www.independent.co.uk/news/uk/home-news/a6808386.html