Thames Water has warned it will not survive unless it is allowed to increase water bills by almost 60% over a five-year period. The UK’s largest water company demanded the bill hike after the wider water industry issued a scathing response to a proposed cap from the regulator for water bill rises.
In July, regulator Ofwat proposed an average £19 a year ceiling on water bill rises, with a final decision due in December.
But the water industry has argued the increase is not enough and said there was a risk that companies would not be able to raise enough investment to stop things like sewage spills.
Water firms have faced a fierce backlash over sewage discharges and leaks in recent years. Critics have also said companies have historically neglected investment in favour of paying executive bonuses and shareholder dividends.
It has led to a stand-off between regulator Ofwat and water companies over how much customers should pay.
Thames Water has been in the spotlight and faced questions over whether it can survive as it struggles under a £15.2bn debt pile and only has enough cash to fund its operations until the end of May next year.
When all water firms put forward requests to Ofwat for bills from 2025 to 2030, Thames originally asked the regulator to increase bills by 44%, but the regulator proposed a 23% rise.
On Wednesday, the company announced it wanted to go further, hiking bills by as much as 59%. The proposed changes in bills do not take account of inflation.
Such a move would take the average annual water bill to £638 per customer by 2030. Average bills are currently around £443.
Chris Weston, chief executive of Thames Water, said the money from higher bills would be invested in new infrastructure and improving services. “They [customers] are not being asked to pay twice, but to make up for years of focus on keeping bills low,” he said in a response to the regulator.
Mr Weston claimed Ofwat’s current proposal – a 23% rise in bills – would be “neither financeable nor investible”.
“It would also prevent the turnaround and recovery of the company,” he added.