Household water bills to stay high as plans for reform are halted

You’re a prisoner to your unhelpful and expensive water supplier. But plans for a major overhaul that could have increased competition have been shelved

Not all water companies are created equal, or satisfactory, or reasonably priced. But unlike other utilities, there’s precious little you can do about it (Getty/iStockphoto)

You know you’re paying too much for something if politicians start using it as a campaigning point. This general election, that commodity has been water, with the Labour Party pointing to high charges and water company profits as a reason to renationalise the industry.

Shadow Chancellor John McDonnell claimed that water bills have risen by 40 per cent above inflation since the industry was privatised in 1989.

The average family now pays £395 a year for water and sewerage. However, the cost varies widely between companies, with Wessex Water customers set to pay £470 for the 2017/18 financial year, and Severn Trent customers paying an average of just £341.

What’s more, the satisfaction and trust rating for different water companies vary widely, reflecting a staggering difference in customer service and cost.

According to Mettle Consulting, which monitors social media conversations about businesses, the trust rating for Yorkshire and Severn Trent Water is -38 per cent (measured by taking the positive conversation about a company and subtracting the negative). By comparison, the trust rating for Thames Water is -61 per cent, a far lower satisfaction level.

When adjusted for the number of customers, the number of complaints to consumer group the Consumer Council for Water (CCW) is highest for Southern Water, while Wessex Water received the lowest.

Despite the difference in prices and customer satisfaction, household customers are effectively prisoners of their water supplier, even though they can choose their electricity and gas companies.

A spokesman for the CCW says that plans to decide whether to allow true competition in the water industry have been placed on hold. “It’s unclear at this stage when a decision will be made on this,” he said. Business customers have been allowed to switch supplier since 1 April this year, with 9,000 businesses switching in the first week alone.

Until a decision is made on switching for household suppliers, consumers can only save money on water by choosing to install a water meter and then restricting their own consumption, or by signing up to specialist schemes designed for those on benefits or with specific needs.

For some who choose a meter there is a sting in the tail, as some people’s bills increase hugely when they switch. According to the CCW, 40 per cent of people will pay more on a water meter, particularly larger families in smaller homes.

“As a rule of thumb, if you have more bedrooms in your family than you have people, you are likely to save,” the spokesman said.

This is because those without a meter have their water consumption assessed on the rateable value of their property in 1989, so that bigger houses tend to pay more for water. Unlike with council tax bands there is no way to challenge this banding.

However, increasingly families have no choice about whether they have a meter installed or not. Water companies in areas of “water stress” are allowed to install meters compulsorily, and customers can do nothing to stop them.

A spokesman for Thames Water, which is currently introducing compulsory meters for all of its customers, says that people tend to use 12 per cent less water on a meter. Thames is rolling out smart meters, which it says will improve leakage detection as well as decrease water use. “We also know, that by using less water, customers will also save on energy bills – heating water accounts for 21 per cent of an average energy bill,” he said.

Thames is one of four companies rolling out compulsory meters, with the other four being Southern Water, South East Water and Affinity Water. CCW recommends that once a meter has been installed, customers should have two years before they must move to a metered price, during which they will be sent regular comparison bills showing how the price of their water would differ if they were paying the metered price. During this time they can explore various water-saving gadgets to see whether they can save more water and money, the CCW says. This practice, however, is not necessarily observed by the water companies.

Thames Water claims that a water saving shower head could save a family of four £45 a year in water bills alone, while putting a box in the toilet cistern to reduce the amount of water used could save £18. Many water companies offer free water-saving devices. Thames allows you to order shower heads, tap inserts and Save-a-Flush gadgets for free. Southern Water offers Save-a-Flush bags, and Severn Trent offers tap aerators and water leak detection tablets.

If a customer can not be moved onto a meter for any reason – such as shared pipes that can’t be changed – they will be moved onto a new tariff called an Assessed Household Charge if they are in a compulsory metering area. This charge is based on the number of bedrooms in the home. Again, you have a two-year grace period or you can move straight onto this tariff if it is better for you.

Customers should also check whether they are eligible for special tariffs or help to bring water costs down.

All 21 water companies in England and Wales now have social tariffs, which can reduce the bills of low-income households that are eligible for support. Some schemes can reduce bills by more than 50 per cent. Large families and those with medical conditions should also check out the WaterSure scheme, which can help to reduce your bill if you claim certain benefits.

It is also worth checking whether your surface water drains into the main sewers. If your surface water does not enter a public sewer you may be eligible for a discount on your water bill. According to Ofwat, the water regulator, most water companies do not know everyone’s drainage arrangements, so if you qualify for the rebate you have to contact them yourself. There are more details here on how to do this.