Severn Trent customers to receive 'lowest water bills in UK'

The company, which supplies 4.3 million households and firms across the Midlands and parts of Wales, has agreed terms with water regulator Ofwat that will see it cut bills, pump money into maintaining its network and still allow for healthy dividends for shareholders.

Severn Trent says water bills will fall in real terms over the next five years and by 2020 will be around £60 below the industry average.

In 2016 a combined water and sewerage bill will fall to an average of £329, from £333. The company says its customers are already benefiting from six consecutive years of the lowest UK water bills.

Severn Trent said it was also making provision to help four times as many customers who struggle to pay their bill over the next five years.

At the same time it is launching its biggest-ever five year investment programme, worth £6.2 billion.

This includes £3.3 billion of new work to improve service and quality for customer, including around £30 million to improve water quality.

Severn Trent Water says it is also committed to fixing 100 per cent of visible leaks within 24 hours and cutting interruptions to supply by more than half.

Chief executive Liv Garfield said: "At Severn Trent we always seek to strike the right balance between the service customers receive, the bills they pay, and returns to investors and we believe our plan for the next five years achieves that balance, delivering better services, better value and a healthier environment. The price review has been a challenging process but has led to a great outcome for customers. We were pleased that our business plan achieved a high approval rating of 88 per cent from customers.

"We know there is more we need to do to improve our processes and raise our standards, and I'm looking forward to working with the great people in Severn Trent and building on improvements made over the current regulatory period, as we continue to deliver for our customers and communities, shareholders and the environment."

The deal will have the biggest impact on customers in Wolverhampton, Stafford and Birmingham.

People in Walsall, Sandwell and most of Dudley, as well as in Lichfield and Cannock, get sewerage services from Severn Trent but are supplied by South Staffordshire Water.

South Staffs Water aims to cut its bills by four per cent over the next five years, from £142 to £135, alongside investment of £480m in its network. It is expected to get Ofwat's green light for its plan later this week.

Meanwhile, alongside its plans to reduce flooding and blocked sewers, Severn Trent says it is cutting its dividend payout to shareholders in the coming years, starting with a 2015/16 dividend of 80.66p per share, down five per cent on this year's 85.9p. It is also starting a £100 million share buy-back programme.