After Stripping Billions In Profits & Filling Rivers W. Shit, Privatized UK Utilities Set To Raise Rates
Water companies are preparing to announce a significant increase in bills for customers, despite a torrent of criticism of their environmental records. The 11 water suppliers in England and Wales have until the end of January to publish their new household charges, which will take effect from April. In early February, the industry body, Water UK, will then announce how much bills have increased by on average. Last year they went up by £31 to £448.
The announcement is likely to open the floodgates for a fresh round of criticism of an industry facing anger over sewage dumping, executive pay, debt levels and big dividends. The companies have a tightrope to walk. On one hand, they will consider how much more their customers can afford to pay and whether their already damaged reputation can withstand a backlash over bills.
On the other, they need to spend large amounts on infrastructure to fix the country’s leaky pipes and bolster water resources to cope with the climate crisis. Meanwhile, a £10bn promise to improve infrastructure to tackle pollution – ultimately paid for by bill payers – has been delayed. “There is an element of catchup here,” says Martin Young, an analyst at Investec. “The challenges for the water sector are clear for all. In the past, the level of the bill has been very high up the priority scale; as a consequence, some of the investment we would have liked to have seen as a country hasn’t been made.”
The exact rise in charges is determined by several factors. A significant driver is last November’s CPIH inflation figure (the consumer price index including owner-occupiers’ housing costs), used across the industry to calculate annual bills, which came in at 4.2%. On top of this, the regulator, Ofwat, allows companies to charge more if they hit targets on pollution, leaks and customer service. In September, Ofwat ordered 12 underperforming companies to take £114m off bills from April, including £101m from debt-laden Thames Water. By contrast, Severn Trent was allowed to add £88m.
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https://www.theguardian.com/business/2024/jan/21/tide-of-disapproval-awaits-new-round-of-uk-water-companies-price-rises