Morning:
6°c
Thames Water bills can rise more than inflation, says Ofwat
Robert Lea and Jonathan Prynn26 Nov 2009
Millions of Thames Water customers face inflation-busting increases in their water bills over the next five years.
Bills will be allowed to rise by 3.3 per cent more than the cost of living between next year and 2015, regulator Ofwat said today. In today's prices they will rise from an average of £303 to £313, with the biggest annual increase coming in 2012.
Of the major water suppliers, only Northumbrian and Southern will increase bills by more. Across England and Wales bills will rise by one per cent less than inflation over the five-year period.
However, Thames Water initially asked Ofwat to approve a far steeper rise - by 16 per cent more than inflation, to £356 in 2009 prices.
There will be concern at the company that the cap on bill increases will not provide enough money for its programme of Victorian mains replacement. Thames Water has hit its target for reducing leaks in each of the past three years. It has replaced 1,300 miles of ageing pipes but has another 10,000 miles still to go. Ofwat's decision could also affect efforts to reduce sewer flooding. Residents in Maida Vale today accused Thames Water of ignoring their pleas for help after some properties were hit by flooding up to seven times in the past decade.
But consumer groups were disappointed that Ofwat was allowing bills to go up when it had originally indicated that they would be frozen. Tony Smith, chief executive of the Consumer Council for Water, said: "Ofwat has eased up on its demands for some of the companies to be more efficient and that has caused prices to go up beyond what customers find acceptable."
Ofwat chief executive Regina Finn said: "Customers have told us that they want us to keep water and sewage charges flat while maintaining a safe, reliable supply of water We're allowing companies across England and Wales to invest more than ever before, £22 billion."
Essex & Suffolk Water bills are going up by 13per cent, Southern Water bills by five per cent and South East Water bills by three per cent. In the Three Valleys district north and west of London, French-owned water company Veolia has been told to cut bills by six per cent.
Reader views (15)
I know this article is rather old, however... Last year my water bill was something like 320 pounds for the year. Recently I received the bill for this year - a whopping 630 pounds!!
I called to query this insanity believing it was some kind of clerical error that would be rectified. To my horror I was told there is no error, and I was given a speech about "average water consumption for the apartment block (etc)", and given an address to write to (which I will). I have also requested to be put on a metre.
I wish my increase was only 16%.
- Scott Deagan, London, United Kingdom, 26/02/2010 17:17
Report abuse
Headline correction: "Thames Water bills cause more rise in inflation". Paying more for no increase in output is called "printing money" in the technical language of economics.
Oh, and brace yourself, London, for ever longer traffic disruptions and geysers of sewage flooding our golden streets, as the petulant utility managers get one back on us for not waving through their request for a gravity defying 16% rise.
- Bloke, Lambeth, 27/11/2009 12:17
Report abuse
In 1989, against the wishes of 80% of the adult population, Margaret Thatcher aided by Michael Howard imposed privatisation of the water industry.
Amongst other things, they claimed it would result in lower charges upon the captive consumers. Has that happened; of course not. As some of us prophesied at the time, it has turned out to be the biggest and most cynical "con" of the 20th century.
The outcome is not surprising since consumers are now having to fund outrageous pay, perks and pensions for senior and top management of the water companies, in addition to hundreds of millions of pounds in over-generous dividends to shareholders. These two groups are laughting all the way to the bank. They won't be worried by higher charges - nor will the Chief Executive who retired three years ago on a reported index-linked pension of £292,00 pa, i.e. £100,000 more than the Prime Minister working all hours and carrying vast responsibility.
From enquiry it seems that examination by Ofwat of companies' estimates of funding needed is superficial. It reminds me of war-time when scrutiny of government contracts was perfunctory. Contractors had merely to submit their bills, to which the government then added a percentage for profit.
Nevertheless, a spokesman for Ofwat contends that water charges are lower than if the industry had remained in the public sector. I await convincing proof from him of this miracle. When it arrives, I will show you the man who will live for ever !
- Roland Rench, Beckenham., 26/11/2009 23:29
Report abuse
When this wretched administration is booted out of Government next year will whoever takes charge please get rid of these quangos (OFGEM,OFWAT,FSA etc) which are a drain (excuse pun) on public funds and have been about as much good for the consumer as root canal surgery without anaesthetic ! Nationalised utilities and rail with proper funding please !!!! Don't tell me we can't fund it as we always seem to be able to find cash for scroungers and any other country that holds it's begging bowl out !!!!!!
- Andy Woodhead, London, ENGLAND, 26/11/2009 14:05
Report abuse
Thames Water charge upfront for water - which must be unique in the utilities industry. I moved out of London in September, and they're claiming I owe them money for water rates over the period of October 2009-March 2010.
Despite showing them ample evidence that I no longer live in London, or the Thames Water area, I still get unpleasant letters and phone calls from them.
- Jock, Ardmair, Scotland, 26/11/2009 12:22
Report abuse
Oh yes, of course....we've had such a shortage of water lately.
- Janicebyrne, sussex, 26/11/2009 12:02
Report abuse
Thames Water is owned by a consortium led by Macquarie Investment Bank. Macquarie are a mini-me version of the famously named life sucking goldman squid but from down under and with their tenticles in a lot of british pies e.g. Isle of Wight Ferries and M6 toll road to name a few. One thing they all have in common is high charges for consumers and never ending fee rises way above inflation.
- Stuz Graz, Wimbledon, England, 26/11/2009 11:53
Report abuse
You have got to be joking...between gas, electricity and now water prices people on incomes below £20,000 are going to end up living in poverty...why haven't all these firms ploughed over 50% of their profits back into the business over the years instead of giving trustees and managers a big chunk, someone with some legal back ground needs to set up something to help the consumer as no body else seems to care...watch the unemployment rate soar even higher as people won't be able to afford to live a reasonable life and pay those bills.
- Sarah, London, 26/11/2009 11:24
Report abuse
Great, I feel an above inflation wage rise coming on.
- Paul B, London, 26/11/2009 10:34
Report abuse
Yet another utility bill rise. I guess there must be a water shortage and we have to import water from the continent.
Of course pipes need replacing and maintenance is tax deductible and the network that was taken over by the French was reflected by the price they paid at the time.
As a Londoner I am fed up with seeing my hard earned income being sent abroad to swell the coffers of another country while in London we are living in the most expensive city in the world.
Must we continue to subsidize the entire EU through our misery.
- Jenny, Streatham, 26/11/2009 10:22
Report abuse
The streets of London are full of water being wasted by leaking out of the road surface, or manhole covers. Apparently it's cheaper to turn the water pressure up than fix cracked pipes.
Thames Water is Australian owned, and its chief duty is to its shareholders and their profits, not to the people of London.
- Jon, London, 26/11/2009 10:11
Report abuse
Why should the government intervene, the more profits they make, the more tax they pay to the chancellor.
- Shallotman, Basildon, 26/11/2009 09:56
Report abuse
More weak regulation of "Fat for profit" monopolies!
- Dave, London, 26/11/2009 09:40
Report abuse
"Customers have told us that they want us to keep water and sewage charges flat while maintaining a safe, reliable supply of water"
That being the case why have you not stripped Thames Water of their franchise? They've proved consistently that they can't be trusted to provide safe nor reliable water supplies. To add insult to injury they increase their costs above inflation year on year whilst turning huge profits for their shareholders. Governmental overseer offices (OFWAT, OFCOM, OFGEM, etc) are all filled to the brim with old boys club members from the sectors concerned, which is a conflict of interest for a body which is supposed to protect the consumer. It's about time someone reformed this travesty of a system.
- Bob, Cheam, 26/11/2009 09:27
Report abuse
Another rise by a utility company, is there anyone out there protecting the consumer?
- Mr S.Port, London, 26/11/2009 09:17
Report abuse
