Ofwat letting water firms charge twice to tackle sewage, court to hear
Ofwat is unlawfully allowing water companies to charge customers twice to fund more than £100bn of investment to reduce sewage pollution, campaigners will allege in court on Tuesday.Lawyers for River Action say the bill increases being allowed by Ofwat – which amount to an average of £123 a year per household – mean customers will be paying again for improvements to achieve environmental compliance that should have been funded from their previous bills.Ofwat has approved a £104bn injection of cash by water companies to the end of the decade, in what is referred to as its PR24 decision, to tackle record sewage pollution into rivers as a result of underinvestment over many years.Customers of some of the worst-performing companies are facing huge bill rises. Thames Water customers are being charged 35% more, raising average bills from £436 to £588, and Southern Water customers are being charged 53% more, increasing from £420 to £642 a year on average. United Utilities is raising bills by 32% to an average of £535 a year.Lawyers are using the case of Windermere as an example to argue that customers are being unlawfully charged twice. They argue that any investment to repair historic under-investment in infrastructure should be paid for by shareholders, not customers. According to Ofwat rules, customers must only pay for new infrastructure investment, not investment to bring a company into compliance with environmental legislation.Emma Dearnaley, the head of legal at River Action, said: “It is fundamental that the public should not be made to pay twice for water companies’ past failures to invest in improvements to stop sewage pollution. But River Action is concerned that Ofwat’s approach means customers could be paying again. Meanwhile, degraded infrastructure keeps spewing pollution into rivers and lakes across the country that should have been clean decades ago.”The case argues that Ofwat must ensure the billions it approves results in legal compliance by water companies and that customers are charged fairly from now on.Ricardo Gama, of Leigh Day, who is representing River Action at the hearing in Manchester, said: “Our client believes that this case shows that Ofwat has failed to make sure that water bills are used for infrastructure upgrades.“River Action will argue that the money that could and should have been used to make essential infrastructure improvements is now gone, and customers are being asked to foot the bill for those improvements a second time over.”The hearing takes place at Manchester civil justice centre on Tuesday and Wednesday.An Ofwat spokesperson said: “We reject River Action’s claims. The PR24 process carefully scrutinised business plans to ensure that customers were getting fair value and investment was justified.“We stated that customers should not pay twice for companies to regain compliance with environmental permits, and have included appropriate safeguards in our PR24 determinations to monitor this, which we will monitor closely, taking action if required. We cannot comment further at this time due to the ongoing hearing.”
River Action bringing legal action against water regulator over who should foot bill for firms’ past failures to investOfwat is unlawfully allowing water companies to charge customers twice to fund more than £100bn of investment to reduce sewage pollution, campaigners will allege in court on Tuesday.Lawyers for River Action say the bill increases being allowed by Ofwat – which amount to an average of £123 a year per household – mean customers will be paying again for improvements to achieve environmental compliance that should have been funded from their previous bills. Continue reading...
Ofwat is unlawfully allowing water companies to charge customers twice to fund more than £100bn of investment to reduce sewage pollution, campaigners will allege in court on Tuesday.
Lawyers for River Action say the bill increases being allowed by Ofwat – which amount to an average of £123 a year per household – mean customers will be paying again for improvements to achieve environmental compliance that should have been funded from their previous bills.
Ofwat has approved a £104bn injection of cash by water companies to the end of the decade, in what is referred to as its PR24 decision, to tackle record sewage pollution into rivers as a result of underinvestment over many years.
Customers of some of the worst-performing companies are facing huge bill rises. Thames Water customers are being charged 35% more, raising average bills from £436 to £588, and Southern Water customers are being charged 53% more, increasing from £420 to £642 a year on average. United Utilities is raising bills by 32% to an average of £535 a year.
Lawyers are using the case of Windermere as an example to argue that customers are being unlawfully charged twice. They argue that any investment to repair historic under-investment in infrastructure should be paid for by shareholders, not customers. According to Ofwat rules, customers must only pay for new infrastructure investment, not investment to bring a company into compliance with environmental legislation.
Emma Dearnaley, the head of legal at River Action, said: “It is fundamental that the public should not be made to pay twice for water companies’ past failures to invest in improvements to stop sewage pollution. But River Action is concerned that Ofwat’s approach means customers could be paying again. Meanwhile, degraded infrastructure keeps spewing pollution into rivers and lakes across the country that should have been clean decades ago.”
The case argues that Ofwat must ensure the billions it approves results in legal compliance by water companies and that customers are charged fairly from now on.
Ricardo Gama, of Leigh Day, who is representing River Action at the hearing in Manchester, said: “Our client believes that this case shows that Ofwat has failed to make sure that water bills are used for infrastructure upgrades.
“River Action will argue that the money that could and should have been used to make essential infrastructure improvements is now gone, and customers are being asked to foot the bill for those improvements a second time over.”
The hearing takes place at Manchester civil justice centre on Tuesday and Wednesday.
An Ofwat spokesperson said: “We reject River Action’s claims. The PR24 process carefully scrutinised business plans to ensure that customers were getting fair value and investment was justified.
“We stated that customers should not pay twice for companies to regain compliance with environmental permits, and have included appropriate safeguards in our PR24 determinations to monitor this, which we will monitor closely, taking action if required. We cannot comment further at this time due to the ongoing hearing.”
