British Lawmakers Take Aim At Private Water Industry

A report from British lawmakers says the private water industry in the country is charging unnecessarily high prices.

The parliamentary committee blamed Ofwat, the water regulator in the U.K, for the problem.

It accused the regulator of overestimating “water companies’ financing and tax costs when setting price limits. As a result, water companies made gains of at least £1.2bn over the past five years from bills being significantly higher than necessary,” The Independent reported.

“Among those worst hit have been the poorest customers, with average water bills now representing 5.3 percent of their annual income compared with 2.3 percent before the recession. The findings will deepen the anger over the money-making powers of Britain’s privatised utilities,” the report said.

The chairwoman of the committee that wrote the report, Meg Hillier, weighed in, per the BBC.

"Ofwat was set up to protect the interests of customers, most of whom have no choice over who supplies their water yet must pay bills typically running to hundreds of pounds. Many householders will therefore be appalled to learn these bills could have been smaller had Ofwat adopted a different approach to setting price limits for water companies. This approach must be reviewed as a priority,” she said.

Ofwat Chief Executive Cathryn Ross responded to the report, per the BBC.

"Holding companies to account and protecting customers is at the heart of what we do. That's why we've made sure bills will fall by 5 percent by 2020. We will carefully consider the thoughts of the PAC. If companies don't step up — we'll step in,” she said.

On the other side of the coin, a report earlier this year found that U.K. water companies are owed a record high in delinquent bills. In fact, U.K. households broke their own record for delinquent water bills. They owe more than £2.1 billion, which equals about $3.15 billion.

Those figures come from Ofwat, according to The Guardian.

“Britain’s water companies are owed a record £2.1bn by cash-strapped customers, with bad debts adding £21 to the average annual water and sewerage bill. The average water bill is £385 a year, but in some parts of the country it is as high as £482, leaving more than 2.5 million households unable or struggling to pay,” The Guardian reported.