Thames Water to hike Londoners’ bills by £14.55 a month to fix leaks and cut sewage discharges

Heavy lifting: Thames will spend almost £19 billion including the cost of fixing leaks and cut sewage discharge between 2025 and 2030(Jonathan Brady/PA) (PA Archive)
Heavy lifting: Thames will spend almost £19 billion including the cost of fixing leaks and cut sewage discharge between 2025 and 2030(Jonathan Brady/PA) (PA Archive)

The cost of cleaning up London’s rivers and streams and cutting leaks will add £14.55 to Londoners’ monthly bills according to fresh, £19-billion spending plans from Thames Water.

That means hard-pressed households in the capital will face a higher-than-average hike. The industry-wide average monthly increase will come in at £13 by the end of the decade.

Regulator Ofwat will have to approve the proposals, filed by the capital’s troubled utility this afternoon. After a wave of public anger at the the amount of raw sewage overflowing into rivers and the extent of losses from mains supply, Thames has lifted total spending for 2025 to 2030 by 40%.

It said that £4.7 billion would go on “investment in our network and other assets”, which it described as “a record”.

The 15-million customer utility said it consulted 20,000 bill payers during the process. It said the plan “prioritises storm overflows, bathing water status and reducing leaks and pollutions.”

Raw sewage overflows, often triggered by heavy rainfall overwhelming ageing networks, ran for more than 7,000 hours into the areas rivers and streams last year.

Thames also promised to “do more than ever to support customers by introducing an improved social tariff for those who struggle to pay their bills.”

The increase to bills would have been even more, but a slow performance in achieving improvements in the last spending period meant regulators limited the price hike by £100 million last week. The average rise in the industry will add £156 a year to bills by the end of the 2025 to 2030 period, or £13 per month.

It comes after a perceived lack of investment came alongside dividend payouts to shareholders and bonuses and high pay to senior staff. The picture looked particularly acute for Thames Water, amid concern over the finances of the 15-million customer utility. It has a £14 billion debt burden, at a time when rising interest rates are lifting repayment costs.

Its shareholders stumped up £750 million in more cash in July. Its biggest investor is Canadian pension fund OMERS and the UK’s Universities Superannuation Scheme. Thames’s chief executive, Sarah Bentley, resigned suddenly in June after less than three years in the job.

There is still no permanent replacement for her in the top job. Interim co-CEOs Cathryn Ross and Alastair Cochran said today:

“We know our performance in some areas is not where it needs to be. That is why we are turning our business around. We have set ourselves a tough challenge.

“ We are committed to learn from the past and adapt for the future so that we improve our service for you, your community and the world around you. You are impatient for us to make progress. We hear you and we are making progress toward delivering this ambition.”

The political controversy that flowed alongside an increase in raw sewage into rivers, returned as the industry filed its next set of spending plans.

Tim Farron, a prominent Liberal Democrat, said: “It is scandalous that water companies are proposing to hike people’s bills to pay to clean up the mess they themselves have created.

“To make matters worse, water company bosses have paid out millions in bonuses and dividends, money that could have been spent upgrading infrastructure instead.”

The GMB trade union called the wider industry price rises as an “insult”. Gary Carter, its national officer, added:

“Consumers shouldn’t have to foot the bills when water companies have paid out billions in dividends, dumped millions of gallons of sewage in rivers and seas and failed to invest for decades ... Ofwat and the government must not allow water companies to hike bills.”