Welsh Water plans £22 bill reduction and record investment between 2020-25
- 40,000 customers help inform plan for 2020-25
- £22 reduction proposed in average household bill (before inflation)
- Record planned £2.3 billion investment
- 50% increase to 150,000 in customers supported to pay their water bills,
- Four-fold increase in support to customers with priority needs
- Plans for the first stage of tackling the long-term challenges set out in the Welsh Water 2050 Vision such as climate change, population growth, and network resilience
- 92% of customers found plans acceptable and 95% affordable
The only not-for-profit water company in England and Wales has submitted its proposed business plan for 2020-25 to Ofwat – the water industry regulator – which, if approved, will result in a record £2.3 billion investment over the five years and a £22 reduction on the average household bill (before inflation).
The Business Plan has been shaped by its biggest ever customer engagement programme with detailed input from 40,000 customers, and builds on the £2 billion investment between 2015 and 2020 and a decade of below-RPI annual price increases.
The process – undertaken every five years and known as PR19 – has resulted in an investment plan shaped by customers themselves, and prioritises balancing investment with keeping bills affordable, more support for its most vulnerable customers, and tackling some of the biggest challenges facing the company over the next three decades.
It follows the publication of the Welsh Water 2050 Vision, which details how the company will tackle some of the biggest challenges facing the delivery of its services over the next three decades including the consequences of climate change, population growth, ageing infrastructure, the growth of the digital economy, and changing customer expectations. The plan for 2020-25 represents the first stage of the road-map mapped out in Welsh Water 2050 to address these issues.
The company serves more than three million customers across most of Wales, Herefordshire and parts of Deeside and Cheshire, and is the only non-shareholder company in England and Wales – meaning it reinvests the profit it makes to benefit customers. These “customer dividends” have totalled around £350 million since it was bought by Glas Cymru and became a not-for-profit water company in 2001.
Welsh Water has placed six customer promises at the heart of its plan:
- Fair bills for everyone – the company proposes that by 2025 the average bill should be 5% lower - and to work to have more people than ever (150,000) supported by its social tariffs. Achieving this is supported by cutting costs by a further 10% - building on the best record in cutting operating costs since 2000
- Clean, safe water for all – the company plans to replace older pipes in areas where there are more problems, providing better water for nearly one million people. It also proposes to launch a lead pipe replacement scheme for 7,000 homes
- Safeguard the environment – Welsh Water will invest in maintenance and technology to combat blockages caused by wrongly-flushed materials, and reduce the number of pollution incidents. It also plans to produce a third of its energy from green sources by 2025, and improve the water quality of around 400km (250 miles) of rivers
- Personal approach – the company aims to quadruple to 100,000 the amount of people registered for priority support because they are in vulnerable circumstances, as well as ensure customers who contact the company can do it through a service right for them, including in the Welsh language
- Putting things right – it has pledged to reduce leakage by a further 15% over 2020-25 after halving it over the last 20 years, and proposes to provide a free home leak repair service.
- A more sustainable and prosperous future – it will invest more in its flagship “RainScape” project to reduce flooding through natural means, as well as expand its education programmes and investment in visitor centres
A total of around 40,000 customers fed in to the development of the plan over two years – from focus groups, community-based workshops, stakeholder events, our first “online community”, our first-ever “Youth Board”, and the major Have Your Say consultations. Independent research into the overall acceptability of the plan for customers showed that 92% of our customers found the plan acceptable and 95% found it affordable.
Welsh Water Chief Executive Chris Jones said: “As a not-for-profit company, our customers’ interests are at the heart of everything we do.
“The plans aim to strike the right balance between investment for the future, and making sure bills remain affordable for customers today. With better service, more help for the vulnerable, increased investment and lower bills, we are confident that this plan offers even better value for money for our customers in the years ahead.”
Alastair Lyons, Chairman of Glas Cymru, said: “This plan is the culmination of over two years’ work and we would like to thank all those thousands of customers and other stakeholders who have contributed their views during this process to help make this the most customer-driven business plan Welsh Water has ever produced.
“We believe that this is an ambitious plan which represents both a material step forward in ensuring the resilience of the business against the challenges of the future and good value for customers – for the next five years, and for generations to come.”
Welsh Water’s business plan for 2020-2025 has also been scrutinised by the independent Customer Challenge Group (CCG) to ensure that it appropriately reflects customer interests.
Peter Davies, Chairman of the Customer Challenge Group, said: “Our report demonstrates the scale of engagement the CCG has had with the Company throughout the process of developing the plan. The plan has been influenced by customers and the contribution of the CCG throughout its development.
“It is the CCG’s view that the Company has been successful in securing an understanding of the representative views of its customer base, and that this evidence has been used to develop the performance commitments and customer bills in the business plan. The final acceptability testing demonstrates strong support for the plan that meets customers’ expectations, representing improved value for money.”
Percentage change in operating expenditure since 2001 (before impact of inflation)
Change in average household bill (2000-2016, before inflation)