Midland water firms have warned consumers their bills could go up by as much as 11 per cent above inflation between 2010 and 2015, after submitting their draft business plans to regulator Ofwat.

Severn Trent Water, which has 3.7 million customers in the region and was fined £35.8 million last month for deliberately providing false information and poor customer service, will effectively ‘cap’ its bills with a one per cent above inflation increase over the five-year period.

But South Staffordshire Water, which supplies 1.2 million homes across the Black Country, north Birmingham and Staffordshire, is preparing to put up its prices by 11 per cent above inflation over the period, adding £13 to the average household bill by 2015 – mainly due to spiralling fuel prices which represent 20 per cent of firm’s overheads. Thames Water, which services millions of homes in London and South East, announced it expects to raise bills by about three per cent plus inflation, while United Utilities, which manages water and waste water distribution in the North West, told customers average bills will go up by just over two per cent above inflation.

In August 2004, when the water companies submitted draft plans for 2005-2010, Severn Trent told customers they would see their bills soar by 27 per cent from £210 to £267.

Comparatively, its proposed increases for 2010-2015 will see average bills go up by just £3 from £292 to £295 before taking inflation into account.

However, South Staffordshire’s proposed increase means the average water bill in its area could rise from £115 to £128 by 2015.

Sir James Perowne, chairman of the Consumer Council for Water Central and Eastern, said: “We’re pleased that water companies like Severn Trent who were predicting price hikes of 30 per cent-plus in 2004 have adopted a much more sensible stance, as a result of listening to what consumers want.

“In fact, Severn Trent’s predicted above inflation increase is the lowest in the region, with Northumberland Water and Anglian Water pitching price hikes of 2.5 and 3.5 per cent.

“But smaller companies like South Staffordshire Water, who haven’t got any headroom to absorb rising energy costs, have got little choice but to put prices up by a suggested 11 per cent.

“I think this upward trend will continue especially now the EU’s water framework directive is starting to put more pressure on water companies to help make rivers, beaches and the environment cleaner, which means a lot of investment.

“Consumers will probably regard this round of increases as quite reasonable, but after 2015 I think they will see them climb steeply like their fuel bills have.

“I really think Severn Trent is a different company to what it was five years ago, so I am as confident as I can be that we won’t see them making such mistakes again.”

Severn Trent yesterday said customer priorities were a more resilient water supply network, stable bills and a smaller carbon footprint – particularly in Gloucestershire where supply was lost during last summer’s floods.

The firm is investing £25 million in a new pipeline to improve links to water treatment works at Mythe, Strensham and Tewkesbury with the rest of the county, plus extra pipelines and pumping stations to pass water from the Gloucester system through to the Forest of Dean in the event of a loss of supply from Mitcheldean water treatment works.

Tony Ballance, Severn Trent’s director of regulation and competition, said: “We believe our draft plan provides the best balance between improved services, the needs of the water environment and a cost that customers are willing to pay.

“Customers tell us that ensuring a reliable, safe water supply is their first priority, and we reflect this in our plan. Following the loss of supply to customers in Gloucestershire caused by last summer’s flooding, we plan to provide an alternative source of water to large communities that have single supply point.

“We will reinforce our network, install additional flood protection at sites at risk of river flooding and further reinforce our power supplies to reduce the risk of power failures affecting our network.

“In addition, customers want us to ensure charges are fair and bills kept as low as possible. Our bills are already among the lowest in the UK and we intend to keep them that way.”