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Thames Water Criticised For Misleading Claims On Debt Payments To Customers

By Nithya Bose in Business News, posted March 12, 2024

Thames Water has come under fire for allegedly "misleading" its 16 million customers in London and the south-east about the extent of its debt repayments.

The UK's largest water provider said only 3p of every pound spent on customer bills goes to lenders.

However, critics have challenged the claim given the firm's substantial £14 billion debt.

The Guardian's analysis suggests that, between 2018 and 2023, Thames Water dedicated around 28 percent of its annual revenue to managing this debt.

It contrasts the figures presented to customers.

"If one lesson has been learned in recent years, it’s that water companies cannot be trusted"

The company's says its spending includes 48p in every pound for infrastructure and 20p for water supply and treatment, with the aforementioned 3p for lender payments.

However, this breakdown has been criticised for not fully accounting for the financial strain of new loans, repayments, and other financial costs.

The campaigner and former Undertones singer Feargal Sharkey said: “It is misleading. If one lesson has been learned in recent years, it’s that water companies cannot be trusted.

“Whether it’s about how they finance their debt or how much sewage is being dumped.”

Andy White, a senior policy leader at the Consumer Council for Water, said: “Households have a right to expect clarity over how their money is being spent and transparency on bills is essential to rebuilding trust in the sector, which is the lowest it’s been for more than a decade.

“The next five years could see people facing some of the largest ever rises in water bills and companies need to demonstrate to their customers they are getting value for money.

“Regular and clear information is imperative but at present one in five customers feel the communication from their water company is poor.”

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Last month, the Financial Times reported government officials have contingency plans in place in the event of a collapse under the name Project Timber.

Thames Water's financial strategies, including a proposed 40 percent bill increase over five years to fund a £18.7bn infrastructure upgrade.

It has raised concerns with the industry regulator Ofwat and the government.

Thames CEO Chris Weston urged employees “not to allow yourself to be distracted by any media coverage.”

In an internal memo, he told staff to “instead, continue to focus on delivering essential services to our 16 million customers and supporting our turnaround plan to improve our performance”.

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