WATER companies are warning improvements will be put on hold if bills fall as industry regulator Ofwat is demanding.

Wessex Water had proposed average household bills for water and sewage should be £434 by 2015 but Ofwat wants them pegged at £403, a seven per cent drop.

Average household water-only bills for Bournemouth and West Hampshire Water will be around £133 in 2015 which, taking out the impact of inflation, is 15 per cent less than the £158 the company had proposed. The company’s customers also pay a separate sewerage bill to Wessex Water.

Companies can renegotiate before Ofwat makes its final decision on prices in November and new bills come into force from April 2010 to 2015.

Tony Cooke, managing director of Bournemouth and West Hampshire Water, said: “The plan assumed a £53m capital investment over five years. Ofwat has cut that investment by £10m. Clearly that has an impact on what we can deliver.”

Mr Cooke said Ofwat has cut a £4.5m scheme out of the budget for a water main which would link the east and west to create a regional water grid, allowing water to be piped from other areas.

It and other water companies put forward proposals to protect water supply sites from extreme flooding. Ofwat also took this out.

Wessex Water chairman Colin Skellett said Ofwat had reduced spending to develop and improve infrastructure from £1,040m to £936m.

“We’re concerned this could impact on services and the quality of the water environment,” he said.

Gillian Mayhew of pressure group the Consumer Council for Water welcomed the draft but wants to ensure lower prices do not mean priorities were reduced or cut.

The consumer council is continuing to ask for public feedback on Ofwat’s decision at ccwater.org.uk