According to the Orange Partnership, contractors in the water industry are overcharging through staffing costs.
The overcharging has formed part of several uncovered charges which is estimated to cost the industry more than £500 million from 2010-2015.
Phil Joyce , Orange Partnership audit specialist, said: “Unlike other sectors requiring planned and reactive upgrades, major water suppliers require local contractors to handle numerous, frequent, unplanned-for and often remote small jobs. Through extensive forensic audits, over a number of major national water companies, we’ve clearly identified staff cost overcharging as a recurring pattern.”
The claims show specific examples of how “payroll burdens” which are accounting estimates from contractors have been “abused and inflated”.
An example of this is when contractor staff end hours earlier than the billed period, but were unaccounted for because of the remote location of the job, without client supervision, and staff rates that are inflated.
£20 billion has been committed by the water companies for planned upgrades covering the period of 2010-2015, although the auditors estimate that £500 million of this budget will be spent covering unnecessary overcharges.