Our long-term plan

We have successfully negotiated a price review that brings stability for the next five years.

This review coincides with an incoming government which, through its coalition agreement, has committed to evolution rather than revolution of the industry.

Customers indicated during the 2009 price control that they wanted an efficient, safe, reliable supply of water at reasonable cost now and in the future and everything else was of markedly less importance.

Our own research showed that they wanted better service rather than lower bills, but equally, they did not want to see bills go up above inflation either.

The key areas for service improvement were reductions in leakage, improvements in security of supply and a lower carbon footprint.

Our draft business plan therefore proposed flat bills plus service improvements on the issues that customers said mattered to them. By the time of the final business plan the worsening economic climate and new obligations and taxes meant that we could no longer deliver these improvements while keeping bills flat.

So we refined our plan to defer investment on items of low priority to customers, keeping annual bill rises below 1%.

Our final determination from Ofwat reinstated some of the items that we had proposed to defer and cut out some items that customers had said they wanted; in particular metering that would have reduced leakage. Overall, bills in the next five-year period will rise annually at around 0.6%.

Our plan for the next five years is to:

• integrate our water supply assets to improve security of supply, deal with deteriorating raw water quality and improve river flows
• make further improvements to drinking water quality
• further reduce the risk of flooding to properties
• carry out improvements to comply with the Bathing Water, Urban Waste Water and Shellfish Directives
• achieve a further reduction in our carbon footprint by increasing the use of sewage sludge to generate renewable energy
• Our plans also include an investment programme of £1bn, a cumulative K factor of 6% over five years and average bills in 2015 3.1% higher in real terms than at present.
• We are now focused on delivering the outputs and efficiencies required over the next five years while continuing to provide the highest levels of customer service in the industry.