WATER bills across Kent appear unlikely to rise as steeply as companies wanted.

Customers had been warned their average household bills could increase by as much as £100 over a five-year period, with companies claiming the extra cash was needed to improve supplies and water quality.

But the water watchdog Ofwat says the proposed increases are too high and has said companies must keep bills down.

In the case of Southern Water, the company that supplies the bulk of Kent households, Ofwat says average bills should rise by only £44 to about £303 over the period – the equivalent of a four per cent rise or £8.80 a year.

The company had proposed a £100 increase, with bills rising by 17 per cent in the first year.

However, there is a sting in the tale with Ofwat recommending £20 of that increase be added to bills next year to reflect the impact of costs on the company.

Mid Kent Water has been told its proposed increases should be limited to less than one per cent over the five years, compared to the 4.3 per cent it wanted.

The company had set out a plan that would have seen bills soar by 15.1 per cent in 2005-2006. That means average yearly bills for Mid Kent customers should be about £133.

Ofwat says its recommendations, which are now out for consultation before final approval, “strike a fair balance”.

Director General of Water Services, Philip Fletcher, said: "I believe these proposals are fair to customers and to the company, and would benefit the environment.

“Although the average bill rise for Southern Water customers is slightly more than the £33 average for England and Wales as a whole, I am convinced after reviewing the company's business plan carefully that it is necessary. It is essential to maintain a water service in which customers can have confidence.”

The increases would allow the companies to meet additional demand from new houses, Ofwat added.

Southern Water said it would examine Ofwat’s recommendations carefully but made clear there could be repercussions for its £2,000m investment programme.

In particular, it said the impact of the Government’s house-building targets for Kent and the South East had to be recognised.

Stuart Derwent, Southern Water’s managing director, said: "These improvements cannot be delivered without the investment of very large sums of money.

“To fund work of this scale and ensure we have sufficient funds to maintain our many new plants built over the last 14 years, a rise in water charges is necessary. We have to invest the profit generated from that and borrow substantial sums as well."

Companies have until September 15 to submit different recommendations; others have until mid October to comment on the draft limits.

KM-fm's Conor Lennon has this report...