Small firms to be hit by water rate hike, warns FSB

With massive price hikes looming on the horizon, the FSB is calling on the government’s water regulator, Ofwat, to reel in the water companies.

On August 5 the Director General of Water Services, Philip Fletcher, will announce his decision on water bill increases proposed by the industry in May– which in some cases were as high as 45 per cent.

Water companies have tabled an average 29 per cent increase in charges over the next five years arguing that they need the extra revenue to update and maintain aging pipes, improve water quality and comply with environmental legislation.

But, the FSB warns, such dramatic increases are likely to catch small businesses by surprise.

FSB Environment Chairman, John Holbrow said:

“Although as a percentage of annual turnover these amounts may not be huge, the massive price hikes will still be difficult to stomach. Small firms need to carefully budget their outgoings and rely on predictable and stable utility services."

“Moreover, there are large numbers of small firms, such as laundrettes, farmers and restaurants that are high users of water, yet do not have access to the block tariffs afforded to big companies."

“When Ofwat announced the proposed price increases in May it said that although increases were inevitable, it would ensure that price limits were no higher than necessary to update aging infrastructure."

“The FSB is now calling on the regulator to stay true to its word and stop excessive increases.”