HOUSEHOLDERS in the region are facing a hike in water bills next year – more than double what they expected.

In a five-year business plan submitted to regulator Ofwat yesterday, Northumbrian Water is proposing a average annual rise of 3.4 per cent above the rate of inflation for water and sewerage services from next year.

But in its draft plan, released last year, the company, which also provides wateronly services in Essex and Suffolk, estimated that customers would see bills rise at 1.3 per cent above the rate of inflation from 2010.

The proposals would see the average customer bill rise from £297 to £322 between next year and March 2015.

Yorkshire Water has increased its proposed rises from 0.6 per cent above inflation to 1.7 per cent. That would see the average bill increase by £4 a year, taking it from £308 in 2010 to £328 in 2015.

Both companies blamed increased business rates they had to pay and reduced water use by companies, caused by the recession, for the changes.

And both companies’ average bills in 2015 will be among the lowest in the country.

Ofwat could still come back to the companies in June or July to tell them to make changes, before announcing a final figure in November.

Northumbrian Water managing director John Cuthbert said: “There have been a number of significant and unavoidable changes since we published our draft plan, including increased tax charges and business rates.

“The economic recession is also having an impact, with reduced water use resulting in the requirement for higher charges to recover our costs.

“Given these changes, it is inevitable that water and sewerage bills will be higher than we proposed in our draft plan.

“While this will be unwelcome news for customers, we have done all we can to manage the impact of increased costs.”

Mr Cuthbert added that the increase would be phased to prevent large hikes next year.

The Consumer Council for Water, which represents customers, said it was “still pleased” with the plan produced by Yorkshire Water.

Andrea Cook, of the Consumer Council for Water Northern, said: “We have encouraged Northumbrian Water to produce a balanced plan to maintain and improve services and also take into account customers’ willingness and ability to pay, especially in the current economic climate.

“It is unfortunate that the current plans show a higher price increase than first proposed.

We understand the reasons for this, but also recognise the adverse impact on customers.”