Here’s how water companies kept £800m that should be ours

We should have been paying less for water

Over the course of five years, water companies have retained £800m in profits that should have been passed back to the customer, an investigation has found.

Water companies had lower tax and borrowing costs than they expected landing them with a £1.3bn windfall, according to the National Audit Office (NAO).

The companies passed some of this on to customers in the form of lower prices, but kept £800m.

According to the NAO, water ombudsman Ofwat should have been recommending steeper price cuts.

“Customers have not seen enough of the benefits of companies’ unexpected financial gains from factors such as falls in corporation tax rates,” Amyas Morse, head of the NAO, said.

“Ofwat made significant improvements in 2014, but its price cap regime is not yet achieving the value for money that it should.”

If returned to the customer, the £800m would have meant around 10% in cuts to household water bills for a year.

Since the sector was privatised in 1989, bills have increased 40% in real terms.

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