HC Deb 02 March 1981 vol 1000 cc54-5W
Mr. Durant

asked the Secretary of State for the Environment if he will make a statement on his discussions with the water authorities following the consultants' review.

Mr. Heseltine

There has been an extremely successful outcome for which much credit must go to the water authorities, as well as the consultants.

As a result, the total of water rates to be collected in England in 1981–82 will be some £86 million lower than had been planned. For the nine authorities as a whole, the average increase in main charges has been reduced from a planned 19.4 per cent. to 13.3 per cent.

Within these average figures the charges of the individual authorities vary considerably. But the average increases in main charges for individual Authorities has been reduced from a range of 14 to 29 per cent. down to 10 to 16.5 per cent.

Water Authority Original per cent. Revised per cent.
North West 29.0 16.5
Northumbrian 27.8 15.1
Yorkshire 22.0 13.5
Severn.Trent 17.7 13.7
Anglian 19.8 12.4
Thames 14.0 12.5
Southern 16.2 12.6
Wessex 14.7 11.4
South West 17.3 10.0

Average domestic charges were expected to range from 14 per cent. to about 30 per cent. as part of the move to the more equitable charging required by section 30 of the Water Act 1973 and also as a result of the effects of the abolition of the equalisation scheme. Now the range is expected to be between 10.9 per cent. and 18.4 per cent.; though there will still be a considerable range in the increases for particular consumers around these averages.

Four main areas of economy were found to contribute to the £86 million saving.

First, individual authorities have reduced their budgets for operating costs in 1981–82 by £17 million.

Secondly, more recent forecasts of reductions in the rate of inflation enabled more realistic figures to be included for the cost of capital works to be carried out in 1981–82, allowing a reduction of £27 million.

Thirdly, it was found that some authorities had underused their borrowing facilities in 1980–81 and the reallocation of these to other authorities enables them to reduce their rate demands next year. Together with one or two other changes, this has provided a reduction of £17 million.

Finally, a scrutiny of capital expenditure programmes showed that schemes totalling some £25 million could be deferred, leaving a total investment programme of about £725 million.

The Government had already set water authorities their targets for next year amounting to a 1.2 per cent. return overall on revalued net assets. Although there has been some variation in targets for three authorities, the overall percentage return remains the same. Similarly, although there has been some reallocation of the 1981–82 external financing limit, the total of £424 million remains unaltered.

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