Thames Water requests 59% bill hikes despite more sewage spills and waterborne outbreaks

Thames Water requests 59% bill hikes despite more sewage spills and waterborne outbreaks
Courtesy: Sky News

impACT is highly concerned at news that Thames Water, a water and sewage treatment company that supplies 16 million households in London and the Thames Valley, have urged the Water Services Regulation Authority, Ofwat, to sign off on a business plan that would include a 59% increase in household bills despite years of poor operations that have endangered public and environmental health, as well as, numerous other bill hikes. 


As discussed by impACT in May of last year, across the UK 300 000 separate incidents of raw sewage spills, amounting to 824 per day on average, were reported between 2022-23. This sparked national outrage at the, evidently, industry-wide neglect of water and sewage treatment, their obligations to their customers and the nations natural environment. These spills, mismanagement and neglect has resulted, according to a report from the Rivers Trust, in the desolation of the nations waterways, leaving 0% of English rivers achieving a ‘good’ overall status.


Telling of industry-wide neglect and malfeasance: in December 2023, another water and sewage company, United Utilities, was embroiled in controversy as whistleblowers from the Environmental Agency claimed that the company had wrongfully downgraded the rating of sewage spills, particularly at the World Heritage Site, Lake Windermere, to avoid public and financial repercussions. 


Of course, these revelations stoked general public outrage, which was only worsened by news that privatised water and sewage companies in the UK paid out £1.4 billion in total dividends to shareholders in 2022, a £540 million increase from the previous year. 


Despite an apology and a promise that ‘more would be done’ from Water UK (the representative for all nine water and sewage companies), it was revealed in January 2024, that this malpractice has continued: the number of hours in which sewage was dumped into the River Thames has more than quadrupled in the last year. According to Thames Water, 6 590 hours of sewage spills were recorded in the last nine months of 2023, up from 1 420 in the same period in 2022. On average, amid heavy rainfall (which is rather common in the UK) sewage was dumped 18 hours a day.


Worse, major health concerns and outbreaks in the UK, due to water contamination, have been reported in 2024. In Brixham, Devonshire, about 16 000 households and business were told by South West Water not to use their tap water for drinking without boiling due to an outbreak of cryptosporidium (a parasite which can cause respiratory and gastrointestinal distress), with 46 confirmed cases reported. Thames Water customers have also been exposed to risk after a similar outbreak was reported in Beckenham, south east London. In May, a number of people reported similar symptoms to those in Brixham, with some severe cases, including the hospitalisation of an 8 year old boy. Despite this, with pressure from residents in the area to test the water, Thames Water have only tested at one property where an outbreak was reported, and “re-buffed the requests of the mother of the boy who was hospitalised” to run more at their household. Despite similarities with the incidents in Brixham, the UK Health Security Agency stated that “it had not so far found enough evidence to put out an alert”, though it was monitoring connections between people complaining of illnesses locally. 


The Drinking Water Inspectorate (DWI), formed in 1990 as an independent body regulating the safety of water supplied in England and Wales, in response to this latest outbreak in London, urged water companies, particularly Thames Water, “to test thoroughly when asked to do so by it’s customers”, referencing the Water Supply (Water Quality) Regulations 2016. The DWI reminded water companies that they are “required to adhere to the [Water Supply] Regulations 2016” which “include statutory responsibilities for sampling drinking water, investigating concerns identified in the water supply system”. 


In light of public outrage concerning the 2022-23 sewage spills, companies pledged to invest £10 billion in renewing sewers and preventative measures for spills that have likely caused these latest health concerns, but announced that they would recoup this investment through hikes in bills, despite already raising prices by 7.5% in 2023. Additionally, under scrutiny, Thames Water CEO Sarah Bentley resigned and was replaced by former British Gas executive, Chris Weston, who was given a £2.3 million annual pay packet under the mandate to reduce the “heavily indebted utility” company. 


Despite the sheer amount of spills and public health incidents likely related to them, Thames Water and Weston have, according to the Financial Times, been highly concerned with “avoiding temporary nationalisation”. With Weston championing a “market led solution that increases financial resilience”, he has urged Ofwat to accept their latest business plan that he described as “affordable for our customers” despite the so-called ‘Cost-of-living’ crisis (a crisis related to previously mentioned bill increases, particularly from utilities companies) continuing to impact families across the UK. The plan to inflate bills came after shareholders, including Chinese and Abu Dhabi sovereign wealth funds, as well as, UK and Canadian pension funds, claiming the company was “uninvestable” and reversed plans to pledge a further £500 million, this was cited as the primary motivator for hikes without seriously addressing the groups failures to provide safe water to it's customers. 


The actions of Thames Water have illustrated no desire to properly address industry-wide issues that are damaging to both public and environmental health. Whilst, Mr Weston claims that these hikes are “in the best interests of all stakeholders”, as more outbreaks of waterborne infections loom and the waterways in a horrific state, it is clear that Thames Water would rather punish its customers (in a particularly difficult financial landscape) in order to service demands from shareholders. Further, hikes in the cost of water and sewage services, will worsen the financial suffering of households who already pay for environmental protection through their taxes. 


As privatised water companies push for bill hikes in order to service debt and supposedly address infrastructural issues, a wider problem is ignored: dramatic budget cuts to regulatory bodies has drastically reduced institutional capacity to properly monitor critical infrastructure and utilities companies. The Department of Environment, Food and Rural Affairs (DEFRA), although condemning the many incidents that have arisen in the past couple of years, has been an instrumental institutional vehicle for the reduction of the Environmental Agencies (EA) regulatory capacity. Under the guise of improving “efficiency” and through the policies of austerity, the EA has been hamstrung. In 2009, the EA received £213.8 million from DEFRA to address environmental protection demands, in 2021, this figure was £94.3 million. This has meant huge staff redundancies, meaning it is “impossible for the EA to know what’s going on” as limited employees meant a reduction in the agencies ability to go out and test waterways. This is a foundational issue that has allowed utilities companies to continue to circumvent their obligations to public and environmental health, forming a regulatory blindspot where they (like United Utilities) are able to obfuscate the damages done to waterways, put its customers in danger and worsen an already frail ecological landscape.


What has been made clear by the horrific treatment of our natural environment and public health by water and sewage treatment companies, like Thames Water, United Utilities and South West Water:  these privatised utilities groups are not interested in providing the service which they are required to, they are unable to regulate themselves, and a decade of defunding critical regulatory bodies has allowed them free reign to do as they please, and continuously demand hikes in bills without addressing their most pressing issues. 


impACT implores Ofwat to reject Thames Waters’ latest request to increase household bills, and, importantly, challenges the new Labour government to reverse the defunding of vital regulatory infrastructure that was championed by their predecessors. 


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