Summary
In November 2009 Ofwat set the price limits that water companies can charge their customers for the supply of water and the treatment of waste water for the following five years. This Periodic Review 2009 (PR09) determines how much water companies can spend on maintaining their services as well as improving them.
Its Final Determination will keep bills broadly stable, whilst delivering £22 billion of capital investment by the water industry.
Over £4.4 billion will be invested in environmental improvements to benefit river and bathing water quality. At £13 billion, the investment in capital maintenance (£6 billion on the sewerage service) is the largest yet. The total spend on sewerage services is £12.5 billion, the highest sum ever allocated in a Price Review and a recognition of how much more work is needed on these hidden assets. £1 billion will be spent on the prevention of sewer flooding and over £400 million on infrastructure resilience. The Cumbrian floods highlight why these investments are critical to adapt to climate change and to increase the security of water supply and sewerage services to 10 million customers.
We are very pleased with the final determination, the result of hard work and close liaison between the Environment Agency and Ofwat. It is a fair deal for customers and the environment.
Background
This is the fifth price review for the water industry since it was privatised in 1989 and billions of pounds have been spent across the country reversing many years of underinvestment.
Take the Mersey estuary; two decades ago it was not much more than an open sewer. Sewage from Liverpool was flushed directly into the river and the fish had all but died out. Following a massive investment programme by the water company United Utilities, with direction from the Environment Agency, this situation has now been turned around.
Today the Mersey is home to all sorts of fish including salmon which have returned after an absence of nearly a century. It’s not just the environment that has benefited; the whole area has been transformed as water quality has improved. A riverside location is now considered an asset rather than the liability it once was.
Yet the Mersey is by no means unique. There are similar stories up and down the country. A clean environment and good water supply are vital to our health and the quality of our lives as well as having a positive influence on run-down areas in our towns and cities. The challenge for the 2009 price review was to maintain these many achievements and, where necessary, deliver further improvements for communities today and for generations to come.
