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WATERVOICE CHALLENGES 'EASY WAY OUT' FOR FUNDING ENVIRONMENTAL IMPROVEMENTS

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Future improvements to the water environment should not be funded ...
Future improvements to the water environment should not be funded

through customers' water bills alone, WaterVoice will say today (16

October).

Water companies' recent proposals would see the average household

water bill rise by £72 (or 31%) plus inflation between 2005 and 2010.

Planned works range from welcome investment to prevent sewer flooding

and improve the reliability of pipes and sewers, to compliance with

little-understood European legislation such as the Shellfish Waters

Directive.

Maurice Terry, WaterVoice Chairman, speaking today at The Economist's

14th Annual Water Industry Conference in London, will challenge the

Government to think of better and more widely acceptable ways of

funding environmental improvements, such as general taxation or taxes

on pollutants such as pesticides, rather than water bills.

Mr Terry said: 'The bill for environmental improvements should be

shared between everyone who benefits, and not funded exclusively, as

now, by water customers. Under current arrangements, too many water

customers will be paying too much for improvements which have too

little benefit for them. For example, how many pensioners do we see

surfing in wetsuits off the Cornish coast? And yet pensioners in the

South West are facing a 22% above-inflation increase in average water

bills.

'The bill for Network Rail and the main line upgrades do not fall

exclusively on the customer base since they are regarded as a

'national priority' and are funded appropriately. The most recent

figures were £3.6 billion for rail ticket sales, compared to

Government subsidy of £3.8 billion. Why is water different?'

He added: 'Customers know that they have to pay for reliable and good

quality water and sewerage services, and are prepared to contribute

to the costs of improving and protecting the water environment. But

excessive increases in water bills risk turning customers against the

water industry, against the environment and against the Government -

and risk increasing already high levels of customer debt. Loading all

the costs onto customers is the easy option.'

WaterVoice will lay down three challenges on the future of paying for

environmental improvements:

- Will the polluter pay (for example, through taxes on pesticides and

other pollutants) or just water customers?

- Why should environmental improvements not be paid for by general

taxation?

- How do we protect low-income customers from the effects of the

proposed bill increases?

Mr Terry will divide the issues outlined in the draft business plans

into first order priorities (such as a safe, reliable water supply,

good drinking water quality and effective collection/treatment of

sewage) and second order priorities (such as bathing water quality,

shellfish habitats and smells from sewage treatment works). Customers

would find it very difficult to accept bill increases driven by

second order priorities.

Research undertaken in 2002 by MORI for WaterVoice, Ofwat, the

Environment Agency and other key bodies, revealed that only 12% (or 1

in 8) of customers were prepared to pay more than £5 per year for

improvements to water and sewerage services and the water

environment. WaterVoice contrasted this with the extra £36 a year, on

average, suggested by water companies' draft business plans (for the

drinking water and environmental programmes alone).

WaterVoice Committees are looking in detail at each water company's

proposals and will hold further meetings in public in November before

submitting formal responses to Ofwat. Customers are encouraged to

make their views known by attending one of these meetings or by

contacting their regional WaterVoice office (see our website

www.watervoice.org.uk for details).

Notes to editors

1. WaterVoice provides a strong and independent voice for all

customers of the water and sewerag e companies in England and Wales.

2. WaterVoice operates through nine regional committees in England

and a committee for Wales. They represent the interests of customers

in respect of price, service and value for money; they also

investigate complaints from customers about their water company.

3. The ten WaterVoice committee Chairmen form the WaterVoice Council.

The WaterVoice Council and its sub-groups deal with issues at

national and European level.

4. The WaterVoice Annual Report 2002-03 and WaterVoice Programme

2003-04 to 2004-05 are available free of charge from the Ofwat

Library, Centre City Tower, 7 Hill Street, Birmingham B5 4UA on 0121

625 1373; or on the web, at www.watervoice.org.uk

MEDIA ENQUIRIES TO:

Andrew Marsh, Senior Communications Officer, on 0121 625 3637 or

07778 160803 (out of hours).

Susan Adams, Communications Officer, on 0121 625 3659 or

07778 160808 (out of hours).

WaterVoice press releases appear on our website,

www.watervoice.org.uk

WaterVoice

Centre City Tower

7 Hill Street, Birmingham B5 4UA

WaterVoice Press Office: 0121 625 3637

Press contacts: Andrew Marsh 0121 625 3637 or 07778 160803

Susan Adams 0121 625 3659

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WATERVOICE

WV 19/03 16 October 2003

BETTER COMMUNICATION BETWEEN WATER COMPANIES AND

CUSTOMERS TO TACKLE RISING DEBT, SAYS NATIONAL WATCHDOG

Water companies should make early and frequent contact with customers

to tackle the growing problem of debt, particularly as water bills

could be set to rise, says the national watchdog.

Recent research commissioned by WaterVoice and Ofwat indicated that

customers would prefer companies to bill them more frequently and to

send reminders earlier. This would mean that the amounts they have to

pay are smaller and more manageable.

WaterVoice wants companies to ensure that their debt management and

recovery approaches are tailored to collect outstanding revenue more

effectively so as to protect water customers from bearing the cost of

water debt.

Sir James Perowne, Chairman of WaterVoice Central, is also calling on

water companies to consider providing payment facilities at locations

frequently visited by customers such as supermarkets or petrol

stations.

He said: 'Having such a facility may be more likely to provide a

regular prompt to customers. In addition, existing frequent payment

facilities and options could also be more clearly communicated to

encourage greater and more regular use by customers.'

Speaking at Water UK's Customers Conference at the Institute of

Physics in London on Friday, October 17, Sir James will outline the

results from WaterVoice's first research study, carried out during

the summer by Accent Marketing and Research.

WaterVoice and Ofwat commissioned the research to gain a better

understanding of how customers viewed paying their water bills and to

identify ways in which water companies could encourage prompt and

regular payment of bills.

Sir James said: 'People are increasingly finding themselves

struggling to pay their bills. Poor money management and genuine

hardship seem to be the main reasons for household debt.

'We found customers with water debt often had multiple debts and were

continually juggling which bill to pay next, and how much.'

The main recommendations made by Accent in the report included the

need for frequent and effective communication between the water

company and customers as a key factor in encouraging prompt and

regular payment of bills.

'We are in contact with all water companies to examine and take

forward these recommendations,' added Sir James.

Notes to editors

1. Copies of Accent's customer research report Paying for Water,

commissioned by WaterVoice and Ofwat, are available fro m the Ofwat

Library, Centre City Tower, 7 Hill Street, Birmingham B5 4UA,

and on the web at www.ofwat.gov.uk or www.watervoice.org.uk

2. Water companies across England and Wales have submitted draft

business proposals to Ofwat, the economic regulator, which could see

the average household water bill rise by #72 (or 31 %), plus

inflation between 2005 and 2010.

3. WaterVoice provides a strong and independent voice for all

customers of the water and sewerage companies in England and Wales.

4. WaterVoice operates through nine regional committees in England

and a committee for Wales. They represent the interests of customers

in respect of price, service and value for money; they also

investigate complaints from customers about their water company.

5. The ten WaterVoice committee Chairmen form the WaterVoice Council.

The WaterVoice Council and its sub-groups deal with issues at

national and European level.

WaterVoice press releases appear on our website,

www.watervoice.org.uk

WaterVoice

Centre City Tower

7 Hill Street, Birmingham B5 4UA

WaterVoice Press Office: 0121 625 3637

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