Water bills in London are set to shoot up by almost £100 by 2030 under proposals unveiled today by the industry regulator Ofwat.
The watchdog said Thames Water could increase its average household charges by 23% after allowing for inflation from £436 to £535 over five years.
This is less than the 44% hike that Britain’s biggest water supplier says it needs to be able to fix its shattered finances, attract new investors and pay for a multi billion investment programme.
Thames is almost certain to challenge the draft determination from Ofwat for the five year period from 2025 to the end of the decade. Thames and Ofwat officials will now go into detailed consultation ahead of a final decision on 19 December.
Thames boss Chris Weston warned earlier this week that without being able to put up charges by as much as it asked for the company would not be “investable” and risked running out of money by May next year.
Ofwat, headed by chief executive David Black, sets a cap on the amount that water bills can go up every five years. Water companies in England and Wales were privatised as regional monopolies in 1989 by the Thatcher goverment and have been heavily regulated ever since. However, the industry as a whole, and Thames Water in particular have been heavily criticised for their record in allowing sewage to flowing into rivers and the seas while paying large dividends to shareholders bonuses to directors.
Mr Weston was forced to defend his £195,000 bonus at a time when sewage spills into the Thames and other rivers have doubled. Mr Weston said this was because of unusually heavy rainfall.
