Is a £17 fall in water bills a good deal?

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The average household's water and sewerage bill is to drop by about £17 a year in England and Wales.

Does that mean households will get a better deal?

Ofwat has been “too soft” on water companies in the past, says Tony Smith, chief executive of the Consumer Council for Water.

“Only about 60% of customers think their bills are fair and that’s partly because bills have risen for many years and the regulatory system has been too generous to water companies until now. This is much more focused towards customers and what they want.”

“They [Ofwat] are concerned about value for money and fairness and part of that is fuelled by issues around companies not doing the right thing - failing leakage targets and so on - and the companies have to get to grips with that, they have to realise they are providing a very important public service.

Regulator Ofwat said the fall was down to the fact it had "demanded greater efficiency" from firms.

Water UK, the industry trade body, said the average annual bill will fall by 4% to £396.60 from 1 April.

Ofwat boss tells BBC of plan to cut bills

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Tough targets for water companies

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More from Rachel Fletcher, chief executive of Ofwat, who has been speaking to Today about the regulator's later proposals for the water companies.

How can they be made more accountable?

"[These are] tough targets that we are setting as part of this price review," she says, including a further one-third reduction in pollution.

"Those are targets that the companies will be held to, they'll be accountable, not just for reporting against their performance but they'll face tough penalties if they don't achieve those targets."

The regulator will step in where they fail to meet their obligations, she said.

Is Ofwat's longer-term approach akin to nationalisation?

"Who owns the water companies is a matter for the government for the day. How they perform, and pushing them to perform in customers' best interests, ... is what Ofwat is all about," she said.

Good news for consumers, says water regulator

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Rachel Fletcher, chief executive of Ofwat, has been speaking to the Today Programme about the regulator's plan to cut water bills by an average of £50 for customers over the next five years.

"This really is good news for customers. We've found £12bn that can be spent over the next five years in delivering what customers really care for in terms of improved service, services for the future, a growing population, as well as creating a healthier environment," she said.

Breaking£50 water bill cut - Ofwat

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Water companies are to invest additional £6m each day over the next five years - over and above investment to maintain existing assets - to improve the environment and services for customers, and cut bills by £50 over five years, according to regulator Ofwat.

Ofwat chief executive, Rachel Fletcher, said: "The package we are unveiling today signals a brighter future for customers, with better services, a healthier natural environment and lower bills.

Ofwat pricing due

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Tony Smith, chief executive of the Consumer Council for Water, has been speaking to Wake Up to Money about an announcement from water regulator Ofwat about pricing for consumers due today.

"We hope that we hear about flat prices, even after inflation, that customers are going to get what they want, which is a package of improvements and some pretty stretching performance targets for the companies.

"We'd also like to see Ofwat tough on the company efficiency and the costs of financing the companies. We think in the past Ofwat's been too weak."

Ofwat concern over costs

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The water regulator is writing to Anglian Water, SES Water, Thames Water, and Yorkshire Water to give them early notice that it has "substantial concerns" about their proposed costs for the 2020-25 period.

David Black, Ofwat senior regulator, said: “We said we would scrutinise each and every plan in detail to ensure they are robust enough to deliver a high quality, affordable and resilient service to customers in the next five years and beyond.

"We are disappointed that revised proposals from Anglian Water, SES Water, Thames Water, and Yorkshire Water have not yet risen to the challenge we have set them."