WATER bill reductions must be paid for out of bosses’ profits, not workers’ pockets, the GMB union warned today after Ofwat announced a £150 million cut in bills for domestic consumers.

The regulator said that 11 water companies have been fined for missing targets in areas such as water supply interruptions, pollution incidents and internal sewer flooding.

Thames Water and Southern Water performed the worst and will have to return a combined total of almost £80m to customers, Ofwat said.

But other companies, which exceeded their targets, will be able to recover more money from consumers, who could see their bills go up.

Severn Trent Water, which supplies millions of people across England, performed particularly well in the regulator’s review and will be able to increase consumer charges by £63m in the year ahead.

Ofwat said that all the water companies would be permitted to increase charges in line with inflation, using the consumer prices index rate that includes owner occupiers’ housing costs – which hit 8.6 per cent in the 12 months to August.

This means that some reductions could be offset by inflation-linked price rises in customers’ bills.

The review comes amid greater scrutiny of water companies during a period of drought and with some areas of the country facing hosepipe bans during the summer heatwaves.

GMB national officer Gary Carter said: “This dreadful mess is the fault of slack water-company bosses.

“It’s the top brass — and shareholders — who should stump up for this. 

“These fines must not be used as an excuse to further slash the pay and conditions of hard-working employees.

“Ultimately, this is yet another example of water privatisation being a monumental failure.”