Against profiteering & pollution. For public ownership
Against profiteering & pollution. For public ownership
Here is a collection of evidence to support complaints and queries Thames Water customers are pursuing with the water company and the regulators. We include direct quotes taken from some of the letters we have seen from Thames Water when responding to boycotters.
Our complaint: Our money is not being used for what it is legally required to be used for.
Operational costs are the only ones Thames Water customers are statutorily obliged to pay but with Thames Water customers seem to be exploited to cover many other costs which do not seem justifiable.Ofwat recommends that companies maintain a ratio of debt to capital value of 60% but Thames Water’s debt is already about 80% of the value of the business, making it the most indebted water company in England and Wales, and that is before the huge new loan they’re trying to get approved at the beginning of 2025
Payments to shareholders
Thames Water (TW)says: “I’d like to offer reassurance no distributions have been made to external shareholders of the group and they have not taken an external dividend for six years, since 2017“
We Say: In October 2023, Thames Water made interim dividend payments totalling £37.5 million to its holding company, Thames Water Utilities Holdings Limited. In March 2024, the company made further dividend payments amounting to £158.3 million.
Water regulator Ofwat found the payments to be in breach of the company’s obligations under Licence Condition P30 in December 2024 and proposed £18.2 million penalty and clawing back the value of £131 million in unjustified dividend payments.
TW says: “Any penalties or fines issued to TW by Ofwat or any other regulator do not get subsequently funded by customers. When Ofwat imposed performance penalties following an investigation in 2018 into our levels of leakage, the penalties were directly applied to our revenue allowances …. Likewise, any fines imposed for events such as river pollution incidents are paid for by the company.”
“The regulatory mechanisms Ofwat have in place ensure that customers do not subsequently pay for these fines through revenue allowances in the future being increased. As such, neither performance penalties nor fines will be paid for by customers as revenue allowances and subsequent charges are not increased for such items.”
“As advised above, any fines for wastewater pollution do not increase your bill. Therefore this doesn’t exempt you from paying charges.”
We say: TW manages its finances according to the ‘Regulated Asset Base ‘ which allows for a privatised utility to make a guaranteed profit while passing on costs, as well as the interest on debt to the customer. But fines can be treated as business expense which means the amount spent on fines is deducted from the amount TW has for infrastructure and operational improvement. In July 2024 Ofwat denounced Thames Water’s business plan as inadequate, incomplete, and poorly justified, but has nevertheless allowed a 31% bill increase between 2025-2030.
TW says: “Our executives’ salaries and bonuses as part of our executive reward packages are benchmarked with those at other similar-sized organisations. We must pay competitive packages to attract and retain the best people for the job. Bonuses are dependent on achieving specified performance improvements in key areas, which can include leakage, pollution, and customer service.”
“We recognise we’re not performing as we should be in certain aspects, however, there are areas where performance is improving and as such, bonuses have been paid to recognise the things we’re doing well.”
We say: Thames Water has continued to pay staff bonuses worth hundreds of thousands of pounds while cutting back on its spending promises in spite of the serious failures we are seeing in sewage spills and leaky pipes.
Thames CEO, Chris Weston, received £437,000 in just three months, including a £195,000 bonus, despite the company being unable to meet its statutory obligations.
Up until recently our Thames Water bills included this diagram claiming that only 3p in the pound was used for servicing debt but this cannot have been the case for most of 2023 and 2024.
We Say: Analysis shows that on average 28% of Thames customers’ bills were spent servicing debt between 2019 and 2023.
The cost of the £3billion loan to be approved for the 2025 restructuring plan will be more than £800million. Tim Whittaker, research director at infrastructure finance specialist Scientific Infrastructure says “paying the higher interest on debt will hurt Thames’ ability to invest in its business and siphon resources from the company to the lenders. This additional sum will be borrowed at an interest rate of 9.75%. It is estimated that this will add another £250 to every household bill.
Our complaint: The Thames Water monopoly means that our consumer rights in respect of our health and our environment are denied.
The UN special rapporteur on water rights singled out England’s privatised water system for extensive criticism, with Thames Water at the forefront of the failings.
TW says: We continue to make good progress on delivering a £1.25 billion programme of maintaining and improving our operational sites between 2020 and 2025.
We Say: Thames’ own monitoring shows that Thames Water experienced an increase in the frequency and duration of storm discharge events in 2023 in comparison to 2022
As reported at https://www.thameswater.co.uk/media-library/home/about-us/performance/river-health/annual-return-guide-2023.pdf
In August 2024, Thames Water was fined £104 million for sewage discharges, with 17,564 spills reported in the first nine months of the year alone—a 40% increase from 2023.
According to a City Hall analysis in January 2024, instances of sewage flowing into London’s rivers were 5 times the amount for the same period in 2022
In September 2024 Prof. Carolyn Roberts accused six English water companies, including Thames Water, of underreporting sewage pollution incidents over the past decade. This alleged underreporting led to customers being overcharged by up to £1.5 billion. The accusation is part of a class action lawsuit filed on behalf of consumers, claiming that these companies misled regulators by failing to accurately report sewage discharges, thereby avoiding penalties and maintaining higher charges. Specifically, Thames Water is alleged to have potentially failed to report over 6,000 sewage discharges.
