“Cost of water privatisation day”: anti-sewage groups attack water firms as rest of year’s bills go to shareholders and debt

From today, all the charges the privatised water industry makes to bill payers will go towards past and future shareholder dividends, clean water campaigners have claimed.

Analysis of the last available financial year suggests that 11% of water company revenue, and therefore customer bills, left the regulated utilities as dividends.

Figures reported in the Guardian further suggest that an average of 20 pence in the pound is spent on water company debts, rising to 28 pence for Thames Water.

According to research by the University of Greenwich, bill payers have broadly provided enough to deliver all the infrastructure investment to date, with the industry’s £60 billion debts taken on to help pay for its £78 billion in dividends.

In fact, researchers at Windrush Against Sewage Pollution have claimed that since privatisation there has never been a year that Thames Water shareholders put more into the business than they took out.

Campaigners claim the combined figure of 31 pence in the pound goes towards paying for debts and dividends, equivalent to the charges made after the 10th of September.

The milestone, dubbed the “cost of water privatisation day” by industry critics, comes just weeks after water companies claimed they needed higher bill rises to stay afloat.

While publicly owned water companies do borrow to invest, activists believe their cheaper interest rates allow lower costs to the public and higher levels of spending.

Matthew Topham, Lead Campaigner at the public service users group We Own It, said: “The industry is in ecological and financial crisis. Shareholders have treated the sector like an ATM, extracting billions, not a public service stewarding our natural environment.

“Under privatisation, it pays to pollute. Underinvestment in sewage treatment has led to spills, while funds are directed to shareholders’ pockets instead.

“When almost a third of our bills go to a shareholder surcharge, not improving our rivers and seas, it’s no wonder the public are resisting Ofwat’s plans to put up our bills.

“Any bill hikes will serve as a bailout by the public of failed private finance. Keir Starmer has the power to end this rip-off, taking the firm into public ownership for free, as recommended by the Treasury, and halving its debts using Special Administration.”

Matt Staniek, Campaigner with Save Windermere, said: “It’s very clear that the water industry is exploiting the captured bill payers of this country and regulators are allowing it. Instead of allowing water companies to unfairly increase bills, OFWAT should halt these obscene dividend payments to shareholders.

“Labour’s actions so far have been inadequate, despite campaigning heavily on this issue before the election. This is a scam and now Labour are the ones permitting it.”

Later today campaigners from across the country will meet with MPs inside Westminster as part of a “cost of water” drop-in to discuss the future of the industry.

Activists will be joining the March for Clean Water, spearheaded by Feargal Sharkey, on October 26th to demand an end to the sewage crisis [7].