Water Companies to cut jobs after watchdog ruling

New stringent price controls set by Ofwat, the industry regulator, could lead to thousands of job losses as Britain's water companies draw up new plans to adhere to the new ruling.

The deadline for all 21 British water companies to appeal against the regulators ruling – which limits the amount firms can charge homes and invest in network upgrades over the next five years - expired last Monday. Only a few firms attempted to appeal with the majority accepting the settlement. Industry experts believe that huge job cuts will have to be made for companies to cope with reduced revenues.

Among the firms thought to be considering redundancies include Unite Utilities, Britain largest water supplier, with over 9,000 staff, who have already released a statement saying they would be cutting 500 positions by March. South West Water owner Pennon, have not ruled out compulsory job losses to lower overheads. Anglian and Thames Water are also considering cutting staff. In total, the UK's water firms employ over 40,000 direct members of staff.

Bristol Water is the only company to announce plans to appeal against the Ofwat decision.

Ernst & Young water specialist, Richard Laikin said that 'Ofwat is essentially asking water companies to find 10 to 15 per cent overall efficiency savings. Different businesses will find different ways to meet the goal, but clearly cutting back staff will play an important role'.

Ofwat's ruling in November of last year called for an average cut in household bills of 1 per cent by the end of 2015. The water companies were asking for an average increase of £31.

Job Centre Vacancies says: It's a double-edged sword for Ofwat to juggle. On one hand, they want to protect the consumer, who will more than likely have less disposable income than prior to the recession. On the other side of the coin, asking water companies to cut their fees by 1% is going to push them into making redundancies. With British Water companies employing over 40,000 direct members of staff, job losses could peak into the high thousands.

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