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Thames Water plans 10 per cent plus hike in bills

Thames Water plans inflation-busting rises in household bills Credit: Tim Ockenden/PA Wire/Press Association Images

Households in parts of Wiltshire could see water bills rise by more than 10 per cent above the cost of inflation - but elsewhere in the region they could drop by around six per cent. Thames Water wants to make the increase to pay for a new sewer in London.

By contrast Wessex Water says its bills will fall in real terms from an average of £479 a year now to £454 by 2020.

Thames, which pays no corporation tax, last week announced half-year pre-tax profits were up by nearly a fifth to £134.2 million, helped by an above-inflation tariff hike. It is already at loggerheads with the regulator over customer charges.

Thames serves 14 million customers in and around London. It said its current typical £358 bill is £50 below the average for England and Wales but would increase to £398, plus inflation, for 2020.

Last month it was slapped down by Ofwat over plans for a one-off £29 bill hike for next year, because of unforeseen costs including customers failing to pay their bills, as well as the Thames super sewer.

Regulator could block surcharge on water bills

The water regulator, Ofwat, may block a proposed £29 surcharge on bills for thousands of customers in Gloucestershire and Wiltshire.

Thames Water wants to impose the levy next year - on top of its annual price increase, to pay for a new sewer in London and to cover the cost of bad debt.

Ofwat is now challenging the need for the increase, a move welcomed by the consumer watchdog.

Sir Tony Redmond from the Consumer Council for Water said he was encouraged the regulator had taken this decision:

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Plans to increase West water bills to pay for London sewer

Thames Water want to add £29 to every households bill Credit: ITV News West Country

Thames Water wants to increase prices for customers in the West to help pay for a new super sewer in London.

The company, which supplies water to parts of Wiltshire and Gloucestershire, has applied to regulator Ofwat to add an extra £29 onto every household's bill. Thames Water says the company is facing a tough time financially even though its revenues rose to £1.8 billion in the last financial year.

Watchdog 'concerned' at Thames Water price plan

The Consumer Council for Water has expressed disappointment over Thames Water’s plans to increase its prices next year. The company’s proposals could see the average water and sewerage bill in the Thames area (including parts of Wiltshire and Gloucestershire) increase from £354 to almost £400.

The company says the rise is to cover a rise in bad debt, costs associated with the 2011 transfer of private sewers to company ownership, and land purchase linked to the Thames Tideway Tunnel.

Many other water companies absorbed the costs that Thames say they are facing – and they have done so without applying for a further price increase. We believe that Thames Water should do the same. Our research shows that one in seven customers say they can’t afford their water bill. This is reflected in an increasing number of customers defaulting on payments to their water company. Thames Water’s price hike will add to the problem.

– Sir Tony Redmond, Consumer Council for Water

STATEMENT: Cirencester water problems

Thames Water has issued the following statement after 900 homes in the Cirencester area were left without water yesterday.

Problems with the power supply to our Latton treatment works led to interruptions to customers' water supplies in Cirencester on Sunday.

Engineers repaired faults caused by the electrical issues and restored water to customers’ taps by Sunday evening.

We are really sorry for the disruption this caused.

– Thames Water spokesperson

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Bottled water given out as hundreds are without

Hundreds in Cirencester without water

Hundreds of people in parts of Cirencester are currently without water. It's due to a problem with Thames Water. The company is working to fix it and is handing out bottles of water.

Thames Water: the numbers

  • Paid no corporation tax
  • Received a £5million credit from the Treasury
  • Revenues rose by £1.8million
  • Made £549million in underlying pre-tax profits
  • Increased bills by inflation-busing 6.7%
  • Chief Executive Martin Baggs will receive pay rise to £450,000 plus a £274,000 bonus
  • Mr Baggs in line to collect a further £366,000 next month as part of a long-term incentive plan
  • Firm said its taxable profits were reduced by allowances on its £1 billion-a-year investment programme
  • Leakage of 646 million litres a day, up from 637 million litres

We recognise, however, that regardless of these exceptional circumstances, we have not always provided the best service to our customers.

Over the past financial year exceptional weather conditions have presented tough challenges for the business.

The period began with a drought, following the driest two-year period on record, and ended with widespread flooding after becoming England's rainiest 12 months on record.

Despite these challenges we have for the third year running carried out a further £1 billion of improvements to our networks, while the average household bill in our region is the second-lowest in the country."

– Martin Baggs, Chief Executive, Thames Water
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