Nightmare before Christmas for small firms as there will be ‘a far greater rise’ in their water bills – London Business News | Londonlovesbusiness.com

The news just before Christmas that small firms will see a far greater rise in their water bills than expected over the next five years is the kind of stocking filler the small business community really did not want to receive.

Small firms had been bracing for a rise in water bills of over a quarter, so news that the rise will in fact be significantly higher than that, at 42 per cent, is deeply concerning, and very hard to swallow.

Small firms are already facing a grim financial landscape moving into the new year. Our research found that nearly half of small firms pointed to the cost of utilities as one of the main drivers of operating cost increases.

Decisions like today’s show that the system as it stands is not currently working for small firms, and for other customers. The Government has set up an independent commission on the water sector regulatory system, to make the regulation of water more cohesive and less fragmented – something small firms believe is desperately needed, after years of rising bills and worsening water quality.

We also welcome the Environment, Food and Rural Affairs Committee’s new inquiry, announced on Thursday, on reforming the water sector.

Ofwat and the water companies say that the rises in bills for domestic and non-domestic customers are needed to fix the country’s creaking water infrastructure.

It is unacceptable for Ofwat to acquiesce to using small firms as a cash cow. Small firms are hard-pressed on all fronts in terms of margins, and the proposed rises could leave many of them underwater.