Thames Water to charge customers an extra £29 because it needs more profits
Remember that big South East water company that got everyone’s back up over its dry tax coffers? Well, now it wants everyone to feel sorry for it, as it has endured a “tough time” financially. Aw diddums.
That’s right Thames Water is apparently very distressed by its measly £144.9m profit in the year to the end of March – blamed on the freezing weather and rising levels of bad debt. This amount was down by 20% on the previous year, despite a 6.7% price increase for its cash strapped customers. At least the Chief Exec still got his payrise, now earning £450,000 a year plus a £274,000 bonus last time.
In any case, Thames Water have now applied to the regulator Ofwat to ask for their blessing to add an extra £29 to every customer's bill to prop up their profits.
This ‘need more profits levy’ increase, on top of a 1.4% rise already planned for next year, would see Thames customers’ average bills go up from £354 to as much as £396.
Of course some of the extra charge is being laid at the door of the super sewer, being built to take all the crap out of London, but up to £16 (55%) is actually to cover Thames Water for the bad debts of other customers. Figures suggest that around 200,000 of Thames' customers did not pay their bill, and the company has 'no legal power to chase them through the courts'.
Stuart Siddall, Thames Water finance chief, told the Daily Telegraph that there had been a 50% increase in unpaid bills since the recession began saying: "Before the recession bad debts were running at £40 million a year, but now they are up at £65 million. One in 25 bills are not being paid." Other privately owned companies do not get customers who do pay their bills to subsidise those who don't. It would be interesting to see what Thames Water would do if everyone refused to pay their bill in protest, assuming Ofwat agree Thames' request.
Any revisions to price limits will not apply to customers’ bills before April 2014.