County Cllr tells Government water companies should “pay up.”

“the public should not have to “bail out” failed companies”

County Cllr Julie Gibson, the Labour Shadow Cabinet Member for Environment and Climate Change has called on the Government to reassure consumers that they will not have to foot the bill for failed water privatisation. Her calls come as Thames Water becomes the first of the privatised water companies to be bailed out by the Government with suggestions that household bills will have to rise in order to pay for the failings.

Cllr Gibson said: “What we are witnessing is yet another example of a water system that is not fit for purpose. The last few weeks we have seen failings in infrastructure resulting in leaks and sewage being pumped into the sea and now we see the collapse of one of the biggest privatised water companies. When the company was privatised in 1989, it had no debt. But over the years it borrowed heavily and is currently £14bn in debt. Industry analysts say Thames Water’s current debt amounts to 80% of the value of the business, making it the most heavily indebted of England and Wales’ water companies.”

Cllr Gibson continued: “Yet during this time we have also seen shareholders continue to receive eye-watering dividends and bonuses. Thames Water said that it has not paid dividends to external shareholders for the past five years. However, it has paid over £200m in dividends to other companies within the group in the past five years and it is still expected to pay its former boss, who quit last week, a package totalling some £1.5million for 2022 – 2023. This is money which could have been spent on fixing leaks and improving the infrastructure which is badly in need of investment.”

Cllr Gibson said: “According to the regular OFWAT, privatised water companies combined total debt reached £60.6bn by March last year and they have recently raised concerns over the financial resilience of up to five other water companies. We need assurances from the government that if it is forced to take over the running of Thames Water, or any other water company who may find themselves in a similar situation, that taxpayers will be not expected to foot the bill for their incompetence and greed.”