Manx Utilities Authority chairman Dr Alex Allinson has rejected claims it does not know what it is doing when estimating costs.

The authority has come under fire in recent months for increases to the sewerage rate and the water rate of above 6 per cent and for using the retail price index as a way to measure inflation, instead of the lower consumer price index.

In the House of Keys, David Ashford (Douglas North) asked Dr Allinson what estimate was made of the ’inflationary pressures on the authority’s purchasing and running costs over the last financial year’ and how it was calculated.

Dr Allinson said changes in costs could arise from natural gas purchase prices, pay awards, contracted services and other matters. The 2017-18 budget was based on the estimated costs and changes to quantity of goods bought.

’Manx Utilities does not estimate the inflationary pressures it is under, as such, and it is very difficult to express this in a meaningful percentage figure,’ he said.

Mr Ashford suggested the authority was saying ’we do not know’ whether its inflationary costs were more in line with RPI or CPI.

But Dr Allinson responded: ’We do know how much our prices are going up. Your question is about forecasting, and unfortunately forecasting the future is slightly tainted by mistakes.’

While natural gas prices dropped by 2.4 per cent, the impact on MUA finances was only 0.4 per cent he said. Similarly, pay awards went up 2.2 per cent, but only saw a 0.4 per cent change in finances.

Spending details were included in annual reports, he added.