Thursday, 30 April 2009

Remember the Petition against water rates hike for churches?

Thursday 30 April 2009
10 Downing Street

Churchwaterbills: e-petition response

We received a petition asking:
“We the undersigned petition the Prime Minister to instruct water companies to return to charging churches as charities rather than as business premises.”
Details of Petition:
“Changes in water charging structures in a number of regions mean that churches are charged on the same scale as businesses, leading to large (for example, 1300%) increases in annual water bills.”

The Government’s response
Traditionally, surface water drainage charges have been based on the rateable value of properties, as allocated by the Valuation Office. Places of worship, along with other specific groups and organisations, did not have to pay these charges because of their zero rating. Four water companies, Yorkshire (2001/02), Severn Trent (2000/01), Northumbrian (2006/07) and United Utilities (2008/09), have switched from rateable value to area based charging.

The Government supports site area charging for surface water drainage in principle, because it offers financial incentive for customers to install sustainable drainage systems which improve water quality and prevent surface water flooding. However, the Government believes that it is clearly very wrong if customers such as faith buildings, community amateur sports clubs and scout huts are facing hikes in their bills of several hundred per cent, and where there are massive variations between what is being charged in different areas by different companies.

The Government recognises the level of concern over charges for surface water drainage, especially in some areas of the country and for some groups where increases in charges have been disproportionate and insensitive to the needs of water companies’ customers.

It is ultimately for the water regulator Ofwat, the independent economic regulator of the water industry, and individual companies to agree a fair and proportionate system of charging that is sensitive to those organisations who previously enjoyed a cross-subsidy. However, Defra has made the Government’s position clear to Ofwat and to the Chief Executive of United Utilities (whose customers have been most affected, including as a result of miscalculated bills). We have also made it clear that increases in bills of this magnitude are not in line with Defra’s guidance on charging issued to Ofwat in 2000, or Ofwat’s more detailed 2003 guidance to the water companies.

In particular, Ofwat’s guidance states that companies that are thinking of introducing site-area charging need to assess possible impacts on all customers’ bills. Ofwat’s guidance goes on to state that companies will need to take into account the scale and speed of any bill changes to see if they are reasonable and acceptable to customers.

It is for individual companies to prepare their charging schemes and for Ofwat, as the economic regulator of the water industry, to review and approve them. Customers with sensitive properties, who are concerned about disproportionate increases in their bills, or inaccurate bills, should raise their concerns with their water company in the first instance or, failing that, with the Consumer Council for Water.
United Utilities has been the focus of many of the recent concerns expressed in the media and in representation directly to Defra. As noted above, Defra has conveyed its views on this issue to Ofwat and to the Chief Executive of United Utilities.
In response to such representations, United Utilities now proposes to set its surface water drainage charges for 2009/10 at 2007/08 levels for customers such as faith buildings, community amateur sports clubs and scout huts (i.e. at levels prior to the introduction of site area charging), and is also committed to finding a long term solution to this problem for 2010/11 and beyond. This is a very welcome step forward although Defra will continue to monitor this issue and engage further with Ofwat as necessary.

Comment:"and is also committed to finding a long term solution to this problem"
There wasn't a problem before some Water companies decided that here was a soft target that would increase their income. After all, they have to pay their Directors salaries and pension plans somehow.

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