This 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.
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