Thames Water has ‘secure and committed’ funding, Government insists
Thames Water’s troubles has put the water sector’s £60 billion combined debt pile under the spotlight.
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Your support makes all the difference.The Government has doubled down on its reassurances that troubled Thames Water has “secure and committed” funding, as the water sector’s £60 billion debt pile comes under greater scrutiny.
Access to water and utility bills will not be affected by the supplier’s financing woes, ministers were keen to stress.
Downing Street said water regulator Ofwat was on top of the issue, even though the Government is keeping a close eye.
“Of course the Government is carefully monitoring this but it is for the regulator in the first instance,” the Prime Minister’s official spokesman said.
He added that “while there are clearly issues with Thames Water, they have secure and committed funding”.
Absolutely nothing is going to happen in terms of either their bills or their access to water, we have contingency plans – like we do in all of these network utilities – to manage any difficult situations
It comes as Thames Water’s troubles has shone a light on the precarious financial health of other British suppliers.
Total debt in the sector hit £60.6 billion last year, increasing by more than £1 billion from the previous year, Ofwat said.
Late last year, the watchdog flagged four other firms it said it was most worried about in terms of their financial health. These were Southern Water, Portsmouth, Yorkshire, and SES Water.
But ministers have reiterated that customers will not see their water supplies affected as a result of financial troubles.
Health minister Neil O’Brien told Sky News in a message to customers: “Absolutely nothing is going to happen in terms of either their bills or their access to water, we have contingency plans – like we do in all of these network utilities – to manage any difficult situations.”
Senior Conservative Cabinet minister Mel Stride said on Wednesday that “water will continue to flow” whatever the outcome for the company.
Wading in on the saga, the Consumer Council for Water said the prospect of “substantial” bill rises to fund investment in the sector should come with a “strong safety net” to protect households that are struggling.
The group said that bill rises could come from companies’ investing more in environmental policies and improving water and sewerage services.
Thames Water, which is owned by a consortium of pension funds and sovereign wealth funds, stressed that it is working with shareholders to secure the cash it needs.
The firm, which serves 15 million households, had a debt pile of £14 billion last year and the highest gearing level of all water companies – a key measure of a company’s financial risk.
Meanwhile, the largest shareholder of Tideway, the company building London’s new “super sewer”, sought to stress that the project is independent of Thames Water.
International Public Partnerships Limited, which owns an 18% stake in Tideway, said that “Tideway is a completely separate company to Thames Water”.
Thames Water is set to operate and manage the tunnel when construction completes, due to be by 2024.