Private water companies make over £1bn from ‘unnecessarily high prices’

waterThis is, of course, an ongoing scandal. This Blog has been running articles on the excesses of the privatised water firms for years.

It doesn’t make the latest revelation any less obscene.

And there’s no guarantee that anything will be done about it.

The sooner we get a government that will bring these rogue utility firms back under national control, the better.

Britain’s privatised water companies have made windfall profits of over £1bn because government regulators allowed them to charge consumers unnecessarily high prices, MPs have found.

A report from Parliament’s Public Accounts Committee has accused Ofwat, the water regulator, of “consistently overestimating” water companies’ financing and tax costs when setting price limits. As a result, water companies made gains of at least £1.2bn over the past five years from bills being significantly higher than necessary.

Among those worst hit have been the poorest customers, with average water bills now representing 5.3 per cent of their annual income compared with 2.3 per cent before the recession. The findings will deepen the anger over the money-making powers of Britain’s privatised utilities.

Over the past five years, shares in some of Britain’s privatised water companies have surged by 50 per cent over a period when the stock market as a whole has barely increased in value. At the same time consumer bills have risen every year on average by 0.5 per cent above inflation with customers paying £396 a year for water and sewage services.

The committee found that Ofwat had been unduly generous to the companies in the assessments that it had made about the cost of borrowing, corporation tax and investment over the past five years – and now has no way of clawing the money back.

Source: Private water companies make over £1bn from ‘unnecessarily high prices’ | Home News | News | The Independent

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5 thoughts on “Private water companies make over £1bn from ‘unnecessarily high prices’

  1. NMac

    It was strongly suspected at the time most of these public utilities were privatised that the so-called Watchdogs would be in the pockets of the private companies. How right that has turned out to be.

  2. Darren Woodiwiss

    I remember some years ago OFWAT allowed the lowest ranked water company (I think it was Thames) to make £600 million profit. The reason given was… they are a PLC and need to make a profit to allow them to raise more capitol from the market.

    I rest my case!

  3. amnesiaclinic

    Under TTIP none of these industries will be allowed to be renationalised.
    In America there is the ongoing scandal of Nestle drawing millions of litres from mountain lakes and springs for cents while there is a 15 year drought.
    They (Nestle) do not believe water is a human right and just like food, you have to buy it.

  4. Terry Davies

    wonder if the water regulator, Cameron or cronies have vested interests.? ?
    maybe all 3 ????

Comments are closed.