Severn confident of no ban on hosepipes

The company, which supplies customers in South Yorkshire, has the lowest level of water consumption per person in the UK.

The group is heavily promoting the water conservation message in schools and local communities.

Severn said that water consumption declined year on year between April 1 and July 19 as customers responded well to requests to conserve water.

The group, which supplies eight million customers across the heart of England, warned in June that restrictions could be imposed if rainfall did not recover to more normal levels.

Severn’s chief executive Tony Wray is a strong advocate of water trading, whereby companies with excess water can sell it to companies suffering drought conditions.

Currently water companies are not allowed to buy and sell water in meaningful quantities, but this could change under new proposals which are expected to be included in the Government White Paper due out later in the year.

While water is abundant in areas such as North Yorkshire and Northumbria it is far more scarce in the South, particularly the South East.

Mr Wray’s argument is that rather than building more reservoirs in the South East, water companies should build interconnecting pipes to link the various networks around the country.

“Our simple, cost-effective approach will allow water to be traded from one region to another to help balance resources across the country and reduce the risk of supply restrictions in future,” he said.

“This pragmatic approach to water trading builds on the water resources planning already being followed by the water industry and with a Water White Paper expected later this year, gives us a real opportunity to evolve our industry in a sustainable way.”

The Department for Environment has confirmed that water trading will be on the agenda in the White Paper.

However, Yorkshire Water warned that such a move could be detrimental to its customers.

A Yorkshire Water spokesperson said: “We believe that a nationwide ‘super grid’ connecting areas with ample water to those with lower availability is likely to be expensive for customers in Yorkshire.

“Making sure that customers in our region have a plentiful supply of water is our first priority, however, where there is excess water, trading between companies must be incentivised.”

Yorkshire Water added that this already takes place on a modest scale within the industry.

“Where trading will deliver a more sustainable route for meeting water demand, it should be encouraged,” added the spokesperson.

In an update yesterday Severn said it is keeping a watchful eye on the level of bad debts after it raised prices by 4.7 per cent in April, a rise in line with the formula agreed with regulator Ofwat of zero plus inflation.

The bad debt target remains at 2.2 per cent of turnover, although Severn Trent said it is “monitoring future developments closely, especially unemployment levels”.

Operating costs are expected to rise this year due to inflation, higher input costs and taxes, although they will be offset by efficiency savings.