Following Tuesday’s announcement on water bill rises, the consumer watchdog was confident of persuading some companies to give something back.
That could involve limiting prices or investing in services to bring down the risk of hosepipe bans, tackle sewer flooding and leakage. The money could also be used towards social tariffs to help those struggling to pay.
Dame Yve Buckland, chair of CCWater, said: “Water companies are making higher profits than expected and they need to give some of this back to their customers. They can limit their own prices or invest more money into services – they shouldn’t keep it all for shareholders and investors.”
The industry’s coffers have benefitted from high inflation in the past couple of years.
How much extra cash is available won’t be clear until regulatory accounts are published in May, according to CCWater chief executive Tony Smith. However, he said: “We are confident that the industry as a whole is doing very well. If you are improving the returns you give to shareholders, at the same time you should think about giving something back to customers.”
Smith welcomed recent suggestions from Ofwat chair Jonson Cox that companies could consider formal gainshare arrangements. CCWater had mooted the idea in 2009 but Ofwat didn’t take it up, he said. “In principle, we think there is something in it, but we would want to work through the consequences.”
Rob Wesley, head of policy at industry body Water UK, said it was “important to take a rounded view”. He noted that the sector had faced extra costs since adopting private sewers in October 2011.