Water firms make £800m at expense of customers

The average annual household bill for water and sewerage was £396
The average annual household bill for water and sewerage was £396
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The privatised water industry has been allowed to soak consumers for more than £800 million in the past five years, an average of nearly £30 a household, the government’s financial watchdog has found.

In an investigation into the water market, the National Audit Office estimates that between 2010 and 2015, the water companies gained about £410 million from lower-than-expected corporation tax rates and £840 million from lower interest rates than those on which its household pricing formulae were agreed with Ofwat, the regulator.

During the same period, the audit office reckons that the suppliers absorbed costs and provided water bill discounts worth up to £435 million, leaving the water companies about £815 million to the good.

Ofwat tried to reverse some of those windfalls during