Thames Water, supplier to 8.8 million Londoners, today admitted that its customer service levels were “still far below desired levels” and “not good enough”.
It was ranked bottom of the regulator Ofwat’s table of customer service levels last year and admitted that unless it makes significant improvements over the next two years it faces potentially big fines.
“We have slipped down to the bottom of the table and we need to move off that,” said finance director Stuart Siddall. “We are seeing written complaints coming down from 4000 a month at their peak to 1500 in December and susbsequent months. Have we got more to do? Yes. But we are seeing tangible results where we have put in more resources.”
He said that was part of the reason that Thames’ pre-tax profit had dropped from £222 million to £150 million in the year to March. Other reasons were the extreme bad weather, the long-forgotten water restrictions for drought before the Olympics and increasing bad debts from household customers. Revenues rose from £1.7 billion to £1.8 billion.
Bad debts rose from £70 million in 2011-12 to £94 million last year, which is roughly twice what Ofwat had predicted three years ago. Siddall said: “Households are suffering because of the economic situation. We are consulting about ways of giving more help to people in hardship. One idea is to add £2-£4 to everyone’s annual bill for such a hardship fund.”
Thames average bill rose 6.7% to £336 last year.
The owners of Thames, insitutions including Macquarrie, BT Pension Fund and several sovereign wealth funds, including China’s and Abu Dhabi’s, saw the dividend they received last year cut by more than half from £200 million to £92 million.
For the third year running it spent more than £1 billion repairing and upgrading the water and sewerage networks. But overflowing sewers and pollution still were above the company’s own target levels. Siddall said that again this was partly due to the excessive rainfall over the winter but also some bedding-in problems with new systems which should produce improvements in the medium term.
