Water companies told to cut their bills by regulator Ofwat
Water companies have been told by the industry regulator to propose cuts when setting their rates for the later half of the decade, or face it "stepping in" to discover why it has been impossible to do so.
With the region's supplier, South West Water, due to file its price submission for 2015 to 2020 in the next few months, industry regulator Ofwat has urged it to share any gains it has made with its customers.
Despite benefiting from a Government rebate of £50 per year until 2020, water users in the Westcountry face the highest bills in the UK, a reflection of the botched privatisation of the industry in the 1980s.
The average annual water and sewerage bill for customers of the water company is £499, a rise of £164 from ten years ago and £111 above the national average.
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Sonia Brown, Ofwat's chief regulation officer, said: "Rising utility prices and the consequences for customers have been of concern to Ofwat for some time, particularly as average household income has fallen in recent years.
"Factors created by the wider economy have provided water companies with the scope to offer reductions in prices to their customers and invest for the future.
"If they don't offer reductions, water company boards will have to fully explain why prices need to be maintained at current levels or even increased. We are asking the boards of the water companies to challenge hard the plans that are developed by the executive management for pricing over the next five years. If they don't provide adequate scrutiny, we will be forced to step in, and boards will have failed to grasp the huge opportunity they have to build trust and legitimacy between their companies and their customers."
South West Water was the only firm in the UK to see its charges fall in 2013-14, although the average bill faced by customers in Devon and Cornwall would have gone up by £10 without state assistance.
In 2011, Chancellor George Osborne announced the Treasury would hand the region £35 million a year as recompense for it picking up the £2 billion tab to end raw sewage being dumped into the sea, leading to the sky-high annual charge.
A South West Water spokesman said: "We've listened to thousands of customers and organisations and many are concerned about their household bills but almost all want to see no fall in the standard of their water and sewerage services and some want more investment in certain areas like increasing protection for bathing waters.
"Our number one aim is to balance those demands and safeguard all the improvements we have made since 1989 with the need to keep bills affordable. If we simply slashed investment across the board, we would be putting the 4,000 jobs we support in the regional economy at risk and running down the services families and businesses need to live and thrive."