Reports that Thames Water has been lobbying the government to let it increase bills by 40% come after the company’s 30-year history of giving out £7.2bn in dividends – and racking up £14.7bn in debt – has put it on the brink of collapse.
High levels of debt mean that much of customer bills are swallowed up by paying interest on company debt – with 28% of Thames’ revenue from bills spent paying interest or fees on debt on average between 2019 and 2023. That leaves less money for customer services, or investment in infrastructure.
Though Thames is one of the most vulnerable companies, the pattern is repeated across England’s water industry with almost 20p in every pound paid by customers going to servicing the industry’s significant £60.3bn debt pile.
