Yorkshire Water has defended an “unwelcome” increase in customers’ water bills by saying the rise will help pay for a £329 million programme of improvements to services.

The Bradford-based company yesterday announced the average bill in the region would increase by £1 a month from April 1, a 3.3 per cent hike - but would keep its charges below the national average charge, which is rising to £388.

The firm said customer charges would help fund investment to meet a growing population and tackle climate change, including: * A £30 million project to create the UK's first large energy neutral waste water treatment works at Esholt.

* A £2.5 million scheme to replace ageing water pipes in Bradford and Shipley to reduce the number of burst pipes and cut leakage.

* A £1.5 million initiative to install a new underground reservoir in Steeton, near Keighley, capable of holding 900,000 litres of drinking water * A £2.1 million scheme in Cleckheaton to improve the local sewer network and install an underground waste water storage tank to help reduce the risk of sewer flooding in the area during storm conditions.

Richard Flint, Yorkshire Water’s chief executive, said: “We know that things are really tough out there, with a lot of people really feeling the pinch, which is why it’s so important that essential service providers like ourselves explain exactly why price increases are necessary and just what they will finance.

“A significant part of this rise is down to inflation, and the fact that the price of many of the products and services we use as a company has risen. The remainder of the increase will be used to fund our ongoing investment.”