Limits on the company's charges are set by our regulator Ofwat over a five year period. The current period is 2005-2010 and the limits were agreed in 2004.

During this period the company is carrying out a major programme of environmental and service improvements across Kent, Sussex, Hampshire and the Isle of Wight totalling about £1,800 million, at current prices. This is continued in our Monitoring Plan.

To finance the necessary capital investment and also the running of the company, Ofwat has authorised an average annual bill increase from April 2005-2010 of £13 a year, excluding inflation.

The average household bill for 2008/9 is £359, made up of an average water bill of £126 and a wastewater bill of £233.

The scale of service improvements is huge – equivalent to £1,200 for each property in the area.

A rise in water charges is necessary so we can use the profit generated to help meet the cost of the improvements but, to help moderate our prices, we are borrowing substantial sums as well every year.

While we fully realise the significance of these bill increases, they are inevitable when we have such a large improvement programme to deliver.