I regularly lecture overseas students about sustainable water solutions. There are two things that elicit the most questions. One is separate hot and cold taps at washhand basins! The other is that only 35% of domestic customers in the UK pay for water depending on the amount that they use, with the remaining 65% paying for water based on the rateable value of their homes. We are so used to this method that there is still opposition to paying any other way, and it is often suggested that it’s a fair system because the larger a property, the greater the number of people living there and the higher the water use. It is evident that this argument is flawed, but even if it were correct there are other anomalies to the rateable system that mean, as a method of charging for water, it is a system in need of reform. The rateable value is set on dwelling size and proximity to amenities. Therefore water can cost more for a household in a two bed flat in the centre of town than in a three bed house in the suburbs, because the dwelling is near to restaurants, shops and transport hubs. Now, that really is a mad system.

Mass retrofit of meters
The water companies set their prices in five year blocks, with all pricing strategies agreed by Ofwat. The current spending review runs from 2010-2015. Following the drought in the south east of England in the summer of 2006, the Environment Agency categorised the whole of the south and east of England as being under acute water stress, and began to press for metering of all domestic properties within those areas by 20201. Ofwat responded by requiring water supply companies in these areas to set a strategy for mass metering of dwellings. For individual houses retrofitting meters is usually straightforward. But for many flats it is far more complicated, especially blocks with a communal cold water system. At present, customers who request a water meter but live in a flat where it is too costly to retrofit, are billed for the average amount of water the flat would use if all bed spaces were occupied, which neither rewards careful use nor penalises excessive use of water.

Southern Water, currently has 40% of its domestic customers on a meter, successfully implemented the mass retrofit of meters on the Isle of Wight in the late 1980s, and is the first major UK water company to implement a mass metering strategy to transform the way their customers pay for water. By 2015, 95% of their domestic customers will be on a meter.

Aware that the customer base includes many families on low incomes, in smaller properties, whose bills are likely to rise once they start paying by volume, Southern Water is implementing a transition time between the two ways of billing. After the meter is fitted, customers will remain on the rateable tariff (possibly for as long as two to three years) if meter readings show that their use is high; however, they will be told how much their bill would have cost were they to pay the volumetric charge. The smart meters that Southern Water are retrofitting will highlight leakage which the company will repair, free of charge2. They will also retrofit water efficient measures, and provide tailored advice about how the household can best change their behaviour to reduce their water consumption. It is a very supportive package and hopefully will be followed by other companies as they too begin to mass retrofit water meters.

Underground leakage
Water companies are only required to actually read meters once every two years, yet bill every six months; therefore three in four bills can be estimated. Meters are sited at the boundary of the building curtilage and can have long branch pipes. After mains replacement work has been carried out in a street, small leaks on branch pipes can increase markedly due to the increased pressure and flow rate. Most underground leaks are not visible, and consumers can suddenly be presented with a huge rise in their bill. The bill is “correct” in that the amount of water billed for has passed through the meter but the building has not increased its use of water, and the consumer has had no way of knowing that there was a leak. It is now realised that underground leakage can be such a serious issue that facility managers in schools and public buildings are urged to manually check for underground leaks3. Even with the shorter branch pipes common in many domestic properties underground leakage can still be a serious issue. If meters were installed inside buildings the consumer would pay for water actually used, which is a far fairer system.

UK domestic consumers do need to start paying for water based on the amount used 4. However, when meters are retrofitted to a domestic property the branch pipe should be replaced to the internal stopcock, and water companies should be required to read meters every six months if it is fitted externally. The companies should pay for underground leaks to be repaired and refund any historic leakage payments. Saving water should be a joint undertaking with both customer and water company playing their part.


  1. The other classifications are moderate and little water stress
  2. Up to a maximum of three leaks
  3. By reading meters at the end of one day and the start of the next
  4. As long as vulnerable customers are protected

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Changing the way we pay for water