Thames Water is to appeal to the UK’s competition regulator to be allowed to raise customers’ bills over the next five years even higher than previously granted, prompting a furious reaction from campaigners.
The water company, which serves 16 million customers in London and south-east England, will ask the Competition and Markets Authority (CMA) for permission to raise bills from 2025 to 2030 by more than the 35% the water regulator for England and Wales, Ofwat, approved last year.
Thames Water, which is on the verge of financial collapse, had wanted to raise bills by 59% over the next five years. It said on Friday morning its board had concluded that Ofwat’s final determination would not allow the investment and improvement needed to improve its services.
The move was swiftly criticised by clean water campaigners. Feargal Sharkey, the former lead singer of the Undertones, said Thames was showing “two fingers to customers” by seeking even higher bills, having “dumped billions of litres of sewage into rivers” and extracted too much water from chalk streams.
The appeal will not affect bills for the financial year starting in April, and the company said it would not delay spending on much-needed upgrades, with the company trying to reduce controversial discharges of sewage into Britain’s rivers and seas.
“We are focused on putting the business on a long-term stable footing so we can succeed in our turnaround, and build and maintain an infrastructure that supports growth and can withstand the effects of climate change,” the chair of Thames Water, Adrian Montague, said.
“We put forward a realistic business plan for 2025-30 that addressed our customers’ and stakeholders’ priorities such as providing safe and resilient water supplies and improving performance. After careful consideration, our analysis shows that our final determination for the next regulatory period will continue to impact our ability to fund the improvements our customers and the environment so rightly want and deserve.”
However, the state-appointed advocate for consumers’ rights, the Consumer Council for Water, said that while customers wanted investment, they also expected value for their money.
Mike Keil, its chief executive, said: “Customers of Thames Water are already facing steep bill rises and they will be incensed the company now has the temerity to pursue an even larger increase. This is a company which has a poor track record on service delivery and customer complaints, so people will rightly question why it should be trusted with even more of billpayers’ money.”
The Liberal Democrat MP Charlie Maynard said Thames Water should not be allowed to raise bills further because a 35% increase over five years was “already far more than enough”.
“So much of the money is being spent on sky-high interest rates and advisory fees,” he said. “Everyone’s focus now should be putting the company into special administration so its balance sheet can be reset and our bills spent on actually fixing the sewage network.”
Maynard was granted permission to intervene in a court hearing this month over a £3bn debt deal to keep Thames Water afloat. His barrister said the company should be put into special administration, essentially temporary nationalisation, to end a “Thames Water debt doom loop”.
Thames is awaiting a court judgment on the debt package, which would allow existing creditors to add to its debt pile of about £19bn. The judgment is expected early next week.
The company has said that without the cash it will collapse on 24 March.
Cat Hobbs, the founder of the campaign group We Own It, said the appeal to the CMA was a “desperate bid from Thames Water to rake in even more cash from the public as it drowns in its own debt.
“This company is a joke, but the joke is at our expense. The government must immediately bring Thames Water into special administration and permanent public ownership. That is the only way it will work for households and the environment.”
