Thames Water to increase bills by over 40% to address debt crisis

The UK’s largest water and wastewater organisation is trying to persuade the regulator to let it raise consumer bills by 44% within the next five years.

Thames Water has been facing a huge debt crisis which has started rumours that the organisation could be taken over by the government. However, today, 22^nd April, the supplier said it had updated its spending plans for 2025 to 2030 after discussions with Ofwat, the industry regulator.

The company has claimed it will spend a further £1.1bn to address environmental concerns over dumping in the sector, however it is estimated that Thames Water has around £14.7bn in debts and has come under fierce criticism for water leaks and sewage spills.

Last month, when Oxford and Cambridge hosted their boat race, both crews were issued safety advice to avoid swallowing splashed water from the Thames and last week, Steve Backshall described the river pollution as ‘toxic’ after Bangor University analysis found high levels of norovirus and E. coli in water samples that were taken from the river.

The details of what the £1.1bn will be spent on remains unclear and the new total investment of £19.8bn will require customer bills to rise by 40%, reaching an annual average bill of £608.30 by 2029-30.

Originally, Thames has proposed investing £18.7bn between 2023 and 2030 and increasing consumer bills by 40% on top of inflation, but Ofwat dismissed this plan.

Mike Keil, chief executive of the Consumer Council for water, said: ‘On the surface the proposal for more investment from Thames Water is a positive step for its customers that have endured some of the worst customer service in the sector.

‘We should not lose sight of the fact that only 16% of its customers thought the company’s proposed bill rises in its five-year plan were affordable. This announcement appears to offer nothing to ease the fears of those already struggling to pay.’

Thames Water aren’t the first organisation planning big price hikes over the next few years. In October 2023, Southern Water proposed a 66% price rise on top of inflation, while Severn Trent put forward a 37% increase. 

It is thought that a decision will come from Ofwat at a meeting held on 23^rd May, with a ‘draft determination’ of what companies will be allowed to charge from next year on 12^th June.

Image: Kevin Grieve

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