By Lauren Howells.

Domestic water bills could fall on average by more than 4% in real terms across England, according to Water UK.

In a summary of the water industry’s plans in England for 2020-25, Water UK said that although exact changes in bills would vary across England, they expected that by the end of the 2020-25 period, the average customer would have seen their bills increase by less than inflation for a whole decade.

Water and waste company Severn Trent’s plans for 2020-2025 included a real reduction in bills for its customers of 5%, as well as a £6.6 billion in investment over the five-year period.

United Utilities plans to cut water bills by 10.5% by 2025

Customers in the North West could expect to see one of the largest average water bill reductions after United Utilities announced that it planned to cut water bills by 10.5% in real terms by 2025. If the plan is accepted by Ofwat, United Utilities says that bills would fall by an average of £45 by 2025, supporting 250,000 customers to move out of water poverty.

Thames Water, however, said that although it planned for bills to remain flat in real terms over the five-year period, its plans included £2.1 billion to “boost resilience and reduce leakage”. Thames Water was fined £120 million earlier this year to compensate customers over leaks.

It what its CEO described as its “most ambitious plan” to date, Anglian Water set out a £6.5 billion investment programme but said that its bills would rise by less than 1% over the five-year period.

As well as plans to keep the average bill below inflation, South West Water announced that it planned to offer customers a £20 million shareholding and “a greater say in the business”, building on its WaterShare scheme which rewards customers for its outperformance.

Ofwat will publish an assessment of plans on 31 January 2019

Cuts planned on domestic water bills

Every five years, water companies in England submit their business plans to Ofwat, the industry’s regulator, for approval.

As part of the regulator’s 2019 price review, the business plans for 2020-2025 will be scrutinised, before an initial assessment of each company’s plan will be published at the end of January next year. Ofwat says that the best plans could benefit from incentives, while those that fall short will face “closer scrutiny and interventions and could receive lower returns”.

Final decisions on the services water companies will have to deliver and the limits on prices they will be able to charge customers will be made in December 2019.

Senior Director for Strategy & Planning for Ofwat, John Russell, said that Ofwat had reached a key milestone in its price review process.

“From now until January 2019, we’ll pore over each and every business plan and we’ll be looking for evidence that they are robust, ambitious and, crucially, that they have been shaped by customers.”

“All companies have had an opportunity to develop high-quality plans, but where plans aren’t sufficiently ambitious or stretching, we’ll step in to protect customers and the environment,” he added.