'A good deal for water customers and still enough for investment'

THE fact that water bills for the majority of Derbyshire households look set to fall over the next few years could be seen as positive news, particularly in these testing economic times.

With bills for other utilities such as gas and electricity going through the roof, Ofwat's decision to force Severn Trent to reduce the amount it charges for water and sewerage services should come as a bit of welcome relief for hard-up households.

The regulator has told the water giant that its bills must come down from an average of £304 a year (including both water and sewage services) to £291 by 2015, a reduction of £13, or 4%.

This compares well with the national picture, where average bills will fall £3 to £340.

Severn Trent Chief executive Tony Wray declined to be interviewed about Ofwat's decision but instead issued a short statement to the London Stock Exchange yesterday afternoon.

He said: "Ofwat's final determination is a complex document with a huge volume of data and information to analyse and consider.

"We will take the time necessary to fully analyse the document before responding to our stakeholders."

But the company said some of the new budget will be used to improve flood protection at treatment works, a move that will benefit 650,000 customers.

Severn Trent will also invest more than £115m so that around 1.5 million customers will be served by more than one source of water supply to reduce the risk of it being cut off by extreme circumstances such as flooding.

Around £10m will be spent on surveying nearly a million households to identify and then solve low pressure caused by shared supply pipes.

Sir James Perowne, chairman of the Consumer Council for Water's Central and Eastern Committee, which represents water customers, said: "We're reasonably happy with the outcome. It would seem that Severn Trent has made noises to Ofwat and a compromise has been reached.

"I believe a good balance has been struck. There is absolutely no point in having reduced bills if it means a deteriorating service.

"This decision means that customers are getting a better price, while Severn Trent still has enough to invest in the network."

On Tuesday, Severn Trent posted half-year profits of £188m, 22% up on the same period last year.

The company attributed the rise to improvements in its debt collection performance and cost savings throughout the business.

According to Ofwat, the company wanted to see future bills go up by £13, to provide more money for investment.

However, things could have been a lot worse.

In its draft proposals published in July, Ofwat wanted to see Severn Trent's bills fall by £24.

The company has previously intimated that customers face a simple choice: cheaper bills and a reduced service, or pay more and have a better service.

Allestree couple David and Jayne Morley say they would rather have the latter.

For more than 40 years, their home, along with those of their neighbours in Portreath Drive, have been plagued by waves of raw sewage flooding their gardens and driveways.

The problem has been caused by antiquated waste pipes struggling to cope with the volume of waste created from an estate that has grown over the years.

The pipes' susceptibility to blockages causes the flooding. In an ideal world all of these pipes would be replaced but money is the problem.

Mr and Mrs Morley would rather pay more for their water and sewage than face another flooding incident.

Mr Morley said: "Personally, I'd be happy to pay the £13 if it meant an end to our gardens being flooded."

George Hawksworth, of Vancouver Avenue, Spondon, once helped lead a campaign to eradicate the infamous "Spondon pong".

It led to Severn Trent investing £24m on improvements at the Derby sewage works in Megaloughton Lane.

Mr Hawksworth, 68, said: "I don't think I will really notice £13 off my bill over five years.

"The only thing I didn't want to see was bills go up because I believe we already pay enough for our water."

Severn Trent customer Derek Walton, of Duke Street, Derby, said: "£13 over five years is really a drop in the ocean if you'll pardon the pun. It's laughable really.

"I think Severn Trent will only be concerned that it has enough to keep the shareholders happy."