WATER bills in East Lancashire could be set to rise by up to £13 a year to help pay for a massive improvement programme.

North West Water has warned that prices would increase substantially more than inflation if the watchdog Ofwat accepts proposals to force the firm to carry out more improvements to water and sewerage services than it was planning.

Ofwat is about to start carrying out its pricing review for water companies where it has to decide on limits for bills.

NWW says extra improvements being proposed by the Environment Agency, Department of the Environment and the Drinking Water Inspectorate would cost £3.7million in the next five years and mean bills rising by 5.8 per cent.

The work included in the proposal includes doubling the number of lead service pipes to be replaced, improving bathing and coastal waters, and building or refurbishing 85 water treatment works.

NWW believes customers would prefer environmental improvements to be paid for over a longer time period, reducing the impact on bills. "The size of the programme is such that one pound of every four due to be spent on environmental improvements in England in Wales over the next five years will be spent in the North West," said Harry Croft, North West Water's managing director.

"This is obviously good news for the region but we are concerned about the impact this huge investment programme could have on customers' bills.

"It is almost double the cost of the programme originally forecast."

But Margaret Smith, of the North West customer service committee of Ofwat, today pointed out that when the last pricing review was about to take place NWW warned prices would have to go up far more than they actually did.

She said: "The man in the street would think NWW had overplayed their cards in the past and that the threatened price rises were wide of the mark.

"Some industry analysts argue that water companies are overestimating the costs of environmental improvements.

"But they are having a lot of environmental obligations placed on them and I think the customers are saying they have had enough of paying for them.

"I think they would probably rather see improvements paid for over say 10 years rather than five."

Ofwat is due to make its decision on pricing later this year when it will decide levels of water bills for the years 2000 to 2005.

Independent market research has found that four out of five customers would prefer prices to remain stable or to increase slightly in real terms to fund environmental improvements.

"We are continuing to push for this programme to be carried out at a more measured pace, minimising the impact on bills," said Mr Croft.

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