Bonus: Thames Water’s Sarah Bentley was paid £2 million
Water bills have just risen on average by more than seven per cent, increasing the pressure on household finances.
Yet there are ways that customers can fight back if their water supplier fails to meet certain standards.
Here, we look at how you can hold water companies to account.
DEMAND COMPENSATION
Households can take advantage of a little-known Government ‘guaranteed standards scheme’ if they receive poor service.
The scheme is policed by regulator Ofwat. So, if you contact a water company with a query about your account in England and Wales, it must reply within ten working days. Failure to do so will entitle you to claim £20 of compensation.
The same amount can be claimed if you want to change how you pay your bill and the supplier does not agree to the request and fails to explain why within five working days. You can claim a further £10 if it does not pay up promptly.
There is also a £20 penalty if suppliers fail to turn up to an agreed appointment. This fine must be paid within ten working days – or you can claim a further £10. The penalties also apply if a company cancels within 24 hours of an appointment. Firms will inevitably try to weasel out of paying compensation if they deem the initial enquiry ‘frivolous’ or ‘vexatious’.
If your water pressure is low for at least an hour on two separate occasions within 28 days, you can demand compensation of £25. The exception is if the low pressure is due to a drought or maintenance issues. Pressure can be measured using a £20 gauge bought from a DIY store which is then screwed on to a kitchen tap. A gauge reading of below 0.7bar indicates a problem. Compensation can only be demanded once a year.
If a firm has to temporarily cut off your water supply for more than four hours, it must give 48 hours notice. Failure to do this allows you to claim compensation of £20. If it is not restored within the stated time, you may also be entitled to £20. Late payment of this compensation – exceeding 20 working days – means you can demand a further £20.
A burst mains pipe should be repaired within 12 hours of the water company becoming aware of it. If it is a ‘strategic main pipe’, workmen have 48 hours to fix it. If water is not turned back on by the deadline, you can demand £20. If the payment fails to arrive after 20 working days, you can claim £20 more.
You can contact the Consumer Council for Water on 0300 034 2222 for assistance if your water firm is being unhelpful. If this Government-funded body provides no joy, you can escalate your case to the Water Redress Scheme (0800 008 6909).
REPORT SEWAGE
Holidaymakers have been warned about the danger of bathing this summer at more than 830 UK resorts as raw sewage continues to be dumped into the sea – and our rivers. Water companies have been told by Ofwat that they have until the end of the year to deal with pollution caused by storm overflows and sewage spills.
Gusher: Firms will inevitably try to weasel out of paying compensation if they deem the initial enquiry ‘frivolous’ or ‘vexatious’
Charity Surfers Against Sewage says: ‘Water company fat cats are swimming in cash while we swim in sewage. Last year, instead of investing in water infrastructure, they rewarded chief executives with remuneration totalling £16.5 million and paid shareholders £958 million of dividends.’ Thames Water serves 15 million customers in the South of England. Some 630 million litres of water leak from its pipes each day while it dumps raw sewage into rivers despite a recent £51 million fine for missing pollution control targets.
United Utilities is the worst offender – accounting last year for 40 per cent of all sewage spills into rivers and coastal waters. It has been blamed for the ecological damage done to Lake Windermere.
Sarah Bentley, Thames Water chief executive, was paid £2 million last year, including a £496,000 bonus. United Utilities boss Steve Mogford got a £727,000 bonus as part of his £3.2 million remuneration. He retired last month.
If you suspect a water company has been releasing raw sewage into the sea or rivers, contact it. Also speak to the Environment Agency (0370 850 6506). You may not get personal compensation, but the water supplier can ultimately receive a multi-million pound fine that should deter it polluting again.
If your property suffers flooding from a mains sewer, you can claim back the waste water charge. This yearly fee can vary between £150 and £1,000. If the flooding is confined to your garden, you can claim half the annual charge.
SCRUTINISE YOUR BILL
Suppliers charge separately for supplying tap water and taking away waste. Most homes also pay a surface water drainage charge that averages £25 a year. But if your water drains into the earth, you should not have to pay. Anyone not on the main sewage system and using a septic tank shouldn’t have to pay waste costs. This could knock at least £200 off an annual water bill.
Natalie Hitchins, head of home services at consumer group Which?, says: ‘You could be overpaying if you have either a soakaway or septic tank. Your property deeds should state if the home is connected to the mains sewerage.’
SAVE BY USING A METER
Households with fewer occupants than bedrooms are usually better off with a water meter. The Consumer Council for Water provides a calculator on its website to help work out the best option.
Pressure’s on: Use a £20 gauge to check your reading
A water meter gives a good incentive to economise on usage. Simple economy measures include watering the garden from butts placed to catch rainwater from the roof – and showering (using a £20 water-efficient shower head) rather than taking a bath. These can help save at least £100 a year.
Southern Water gives free water butts to customers while Thames Water offers free aerating shower heads. Andrew White, of the Consumer Council for Water, says: ‘Small usage changes help ease the pressure on our water resources.’
BE WARY OF DIVIDENDS
Investors who rely on water company dividends may need to look elsewhere as regulator Ofwat demands the firms use more of their profits to stop sewage leaks.
Water companies have paid dividends to shareholders totalling £66 billion since the industry was privatised 34 years ago.
Aarin Chiekrie, equity analyst at wealth manager Hargreaves Lansdown, says: ‘Earnings from water companies have tended to be predictable – historically supporting reliable dividends.
‘But threats by the regulator to take action against suppliers who continue to pay dividends despite failing to meet performance standards should be taken seriously. This will put pressure on future dividends.’
United Utilities, Severn Trent and Pennon (owner of South West Water) are listed on the London Stock Exchange.
Last year, they enjoyed pre-tax profits of £302 million, £276 million and £144 million respectively.
The annual dividends they paid were equivalent to 4.1, 3.6 and 4.7 per cent.
