Water bills could rocket by 30%

WATER bills are set to rise by as much as 30%. Plans to increase household charges will be outlined today, with the industry claiming the extra money is needed for modernisation.

But consumer groups have condemned the rises, arguing the work should be financed out of companies' profits

Consumers pay £237 a year on average, following rises of 88% since privatisation in 1990, with the prospect of another £71 increase to come.

The rises would be spread over five years from 2005. Industry regulator Ofwat will make the final ruling, but director-general Philip Fletcher has already acknowledged that rises are on the cards.

Peter Bowler, director of consumer group Water-Watch, said: 'These are Mickey Mouse figures. It's just a joke. The industry is a disgrace.

'The industry has enjoyed artificially high profits for years and Ofwat should be asking where all the money has been going.

'The truth is that the infrastructure is in a terrible state and does need replacing. But the money should come from the companies and borrowing, not customers. On all the evidence, there is no reason for bills to rise.'

The companies claim that to keep the water flowing they must be allowed to push up bills by at least 20% above inflation to pay for the replacement of ageing pipes. With inflation running at 2% a year on average, that means a 30% rise overall.

Water UK, which represents the industry, says companies can no longer rely on 'patching up' their network. It says investment of £ 20bn or more is needed in ageing pipelines and pumping stations, and to meet ever higher standards for tap water, some of them set by Brussels.

Water UK is expected to set out the plans today for the rises. Each water company will follow by setting out its own proposals tomorrow and on Monday.