People with big gardens could be made to pay higher water bills, the boss of a major UK utility said.
(Bloomberg) — People with big gardens could be made to pay higher water bills, the boss of a major UK utility said.
Cathryn Ross, Thames Water’s interim chief executive officer, said it was one way to improve Britain’s creaking infrastructure while protecting people on lower incomes.
“If we could find a way to move towards some sort of more progressive charging for water, I think that might unlock the ability for us to put up water bills for those people who can pay while not putting them up quite so much for people who can’t,” she said during a session with the London Assembly, a group of elected representatives in the capital.
Afterward, speaking to Bloomberg News, she added: “We’re looking for proxies for relatively high income households. One of those proxies might be big gardens, and therefore high levels of water use.”
Ross, who was previously head of the regulator Ofwat, said one in five Thames customers use more than 110 liters per person per day — the standard usage encouraged by the government. She said the matter has been discussed with Ofwat.
Thames, the UK’s largest water and wastewater company, has been engulfed in a crisis as rising interest rates lift the cost of servicing its nearly £14 billion ($18 billion) in debt. Its chief executive officer, Sarah Bentley, abruptly quit last month. Ross and Chief Financial Officer Alastair Cochran were made interim CEOs.
Read More: Why Thames Water Almost Buckled Under Its Debts (QuickTake)
Scrutiny of the privatized industry has been mounting due to chronic water leaks, as well as sewage spills into rivers and seas, putting water companies under pressure to invest in upgrades to the system.
Ross said during a BBC interview Monday that the company’s £4.4 billion in liquidity would be enough to service debt costs for the next few years and avoid a state takeover. But the firm said it would still need “significant additional funding” in the years ahead, even after investors agreed to put an extra £750 million ($960.4 million) into Britain’s biggest water utility.
Water bills have risen 350% since water companies were privatized and consumers are reluctant to pay more. In a survey conducted by Deltapoll for Bloomberg last week, nearly two thirds of respondents said they would not be willing to pay higher water bills to fix sewage outflows into waterways and seas, instead expecting companies to fund this themselves.
“We’ve not been replacing our assets in the way that might have been expected and to be fair, customers haven’t been paying for us to replace our assets in the way that we might have expected,” Ross added.
“I’m afraid it is an unpopular fact, but it is a fact that there is only one source of funding, and the source of funding is ultimately the customer.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.