A ONE-OFF £650 million government payout should be considered in a move to bring rocketing water bills in Plymouth down.

The head of the review into water charging Anna Walker said it would be the ‘cleanest’ of three solutions her inquiry has proposed to tackle the ‘unique’ historic problems faced by hard-pressed South West Water customers.

But she recognised that such a ‘corrective’ adjustment by the Government may be “particularly difficult” given the perilous state of the public finances.

Another ‘remedy’ put forward by the review to reduce the burden on householders, was through contributions by other water customers from across the whole of the country, although it acknowledged this would raise “fairness issues”.

The third option put forward is for a package of measures including the introduction of a seasonal tariff with a premium rate - up to four times the normal cost - levied on additional summer use, discounted bills for the poorest families, and steps to reduce water usage - and so cut bills - for vulnerable groups such as pensioners.

But help for low-income households could cost other South West customers up to an extra £14 a year, which the inquiry warns, could “perpetuate the sense of unfairness”.

The seasonal tariff element could also spark controversy in the tourist industry, similar to that seen against the so-called “bed tax”. It also assumes a constant year-round usage, and could raise practicality issues.

Ms Walker said: “One reason we were so concerned to identify the three (solutions) is we recognise a one off correction by government, which in a sense would be the cleanest solution, may be particularly difficult.”

The inquiry recommends that the industry regulator Ofwat is consulted if the Government wants to take forward any of the proposals.

Ms Walker said: “It’s up to the Government how it pursues the recommendations.”

But she added: “I know the Government is in no doubt about the concern in the South West over bills – absolutely none.”

And hopes have been raised that the specific proposals for the South West will be acted upon, with ministers committing to ask Ofwat to look into the options for dealing with high water bills, resulting from privatisation, and to advise the Government.

The problems faced by water customers in the region, is highlighted with an entire chapter dedicated in the report to the South West in the 239-page report, with its own specific proposals.

The inquiry team visited Plymouth twice to gather evidence during the course of the review.

It points out that South West Water bills are a significantly higher compared to than anywhere else in the country – an average £490 compared to £343.

And customers not on a meter are saddled with far larger bills of £723 on average, compared to £401, which are set to rise by nearly a third over the next five years.

A main cause of the high bills is that since privatisation, the water company had to spend a lot to bring the dilapidated sewerage infrastructure up to the same standard as everywhere else, but with comparatively fewer customers to pay for it.

Labour MP for Plymouth Sutton Linda Gilroy said: “Anna Walker has listened to my constituents and the findings of her report go a long way to helping us in our battle to get something done to help our constituents.”

Fellow Labour MP for Plymouth Devonport Alison Seabeck MP said: “At long last we have recognition that the botched Tory privatisation in 1989 had inbuilt flaws.

“As well as setting out solutions this report sets out some proposals which we now need to seek the support of government for. We will not leave any stone unturned in doing so.”

A spokesman for South West Water said: “We welcome the report's focus on the South West and its highlighting of how charges have been driven by the huge environmental investments we have had to carry out over the last two decades.

“There are many interesting recommendations in particular on future tariffs and how to best help those in most need but we will need to time to study and model the potential implications of these on all our customers and also how practical they might be in practice.”

Environment Minister Huw Irranca-Davies said: “I welcome the publication of Anna Walker’s excellent report. We will consider her recommendations carefully ahead of a full public consultation. Meanwhile in line with the specific recommendations for the South West water area, we will ask Ofwat to consider the options for dealing with the high water bills there which have resulted from the original privatisation, and to advise Ministers accordingly.”