Struggling firm to appeal to CMA to increase water bills by more than Ofwat-approved 35% over next five years. 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. 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% that 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, of a 35% increase, would not allow the investment and improvement needed to improve its services. The appeal will not affect bills for the financial year starting in April, and the company said that 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 Liberal Democrat MP Charlie Maynard argued that Thames Water should not be allowed to raise bills further because a 35% increase over five years was “more than enough”. He said: “A 35% increase is already far more than enough. So much of the money is being spent on sky-high interest rates and advisory fees. 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 argued in court that 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 that debt package, which would allow existing creditors to add to its debt pile of about £19bn. The judgment could come as soon as Friday, although it is expected early next week.
Sign up to Business Today. Get set for the working day – we'll point you to all the business news and analysis you need every morning. after newsletter promotion. 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.