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Water companies should put customers first and not use them as “a milch cow for the financial markets”, according to the former regulator Sir Ian Byatt.
Speaking on last night’s episode of Dispatches on Channel 4, which drew in an audience of around one million, Byatt said that in recent years, many water companies had been paying out “huge dividends” and had been more concerned with financial matters than with their customers.
“Customers should be seen to be gaining from this and not simply a milch cow for the international financial markets,” he said.
According to the programme entitled Floods: Your Money Down the Drain, water company investment in infrastructure has remained static over the last six years in real terms.
Despite this, the programme said, dividends had gone up by more than 40 per cent, while in the same period water companies have paid out £9 billion to shareholders.
However, industry trade body, Water UK argued that without private investment, customers’ water bills would have to go up by a third.
Rob Wesley, Water UK’s head of policy, said: “Investors need to have a return to encourage them to provide money to water companies. Investors have a choice; they don’t have to put money into providing water and sewerage services.
“We need to have continued investment in our water and sewerage services not just for today but also for the long term.”
The programme also asserted that over the last 12 years, the number of sewage pollution incidents in England and Wales has more than doubled.
Thames Water, it pointed out, is in the process of contesting a fine of £14.1 million from Ofwat over allegations that it misreported its sewer flooding outputs from 2005 – 2010.
Richard Aylard, external affairs and sustainability director at Thames, said: “There is a difference of opinion between ourselves and Ofwat about the number of properties that we took off our ‘at risk’ sewer flooding data base. The investigation is ongoing and if it goes against us, then we’ll pay the fine.”
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