Thames Water forced to pay back millions to customers over pollution – but campaigners say it doesn't go far enough

Customers of Thames Water will be getting £73.7m back in the form of lower bills as a punishment for the company missing targets on pollution, leakage and supply interruption.

A total of 15 million customers will see their tariff lowered across 2024 and 2025, as the company says the summer drought was partly to blame for its poor performance.

It’s not the only company to be hit with penalties by regulator Ofwat. Customers of Anglian Water and Dwr Cymru will see £27m and £24m respectively wiped from their bills.

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But campaigners have warned that the fines are insufficient – working out to £4.92 for each of Thames Water’s 15 million customers.

“This shallow gesture is meaningless to communities and another example of the senseless regulation of the water industry by Ofwat,” James Wallace, CEO of River Action, told The Big Issue.

“We would rather see the regulator issue much higher penalties to water companies for failing to provide their legal obligations to customers. Ofwat should direct Thames Water shareholders to urgently invest in fixing its leaky infrastructure, which wastes 600m litres of fresh drinking water a day and spew millions of litres of sewage into the river catchment.“

Water companies found to have missed targets are restricted in how much they can charge, as a way of passing fines onto customers.

At least 72bn litres of sewage have been discharged into the Thames since 2020.

Companies have been accused of “wilfully misleading” the public over efforts to stop sewage flowing into the UK’s waterways, with the Environment Agency saying any reduction in filth flowing into rivers is not down to the efforts of the firms.

“Current water company fines are a drop in the ocean, whilst bosses and shareholders swim in profits. Fines for polluting our waterways must impact the ways water companies run their business, otherwise they’re no deterrent at all,” Izzy Ross, campaigns manager at Surfers Against Sewage, told The Big Issue.

“Last year water companies paid out £965m to shareholders, making the £101m they were fined look like pocket change. It’s absolutely abhorrent that water companies are able to simply absorb the cost of fines whilst people and planet are forced to pay the price. Now is a time for the government to act and end sewage pollution, not take it easy on water companies’ relentless polluting and environmental destruction.”

Any attempt to improve the situation by fixing the country’s antiquated piping system would result in higher bills for customers, warned a report by the House of Lords which estimated a remedy would cost some £56bn.

A spokesperson for Thames Water told ITV News: “They also acknowledge that additional equity funding, indicatively of £2.5bn, will be required during the next regulatory period (2025-2030) to further improve operational performance and financial resilience.

“This is the largest equity support package ever seen in the UK water sector and underscores our shareholders’ commitment in delivering Thames Water’s turnaround and life’s essential service for the benefit of our customers, communities, and the environment.”

“Our turnaround is already delivering performance improvements. Our complaints fell by 28%, the second consecutive significant year-on-year reduction and we have seen improvements in several key performance commitments including a reduction in sewage discharges, internal sewer flooding, and sewer blockages.

“We’re making progress and we’ll continue to engage and work with Ofwat as we implement our plan. We’re determined to do better for our customers and the environment.”