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<p>The Government has regular discussions with Ofwat about its strategic priorities
and objectives for regulation of the water sector.</p><br /><p>Ofwat sets price controls
independently of Government. This independence is crucial to ensure stable economic
regulation which keeps investment costs down and customer bills low.</p><br /><p>In
2009, Ofwat set price controls for the period from 2010 to 2015. During this period
water companies benefited from several factors outside their control, including low
taxation and low borrowing costs. In March 2013, Ofwat challenged companies to share
gains with their customers. The then Secretary of State wrote to companies in November
2013 in support of Ofwat’s drive. As a result, companies absorbed costs and provided
water bill discounts worth £435 million over this period.</p><br /><p>In 2014, Ofwat
delivered a tough price review which means that bills will fall by around 5% in real
terms from 2015 to 2020.</p>
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