News
33 percent of Yorkshire Water Bills ‘Servicing Debts/Dividends’
Analysis of utility company Yorkshire Water’s financial records has revealed that a third of the money paid by typical households in the region is going towards settling debts and making dividend payments, with approximately £140 of the average £442 customer bill being diverted away from front line services.
Carried out by the BBC, alongside David Hall, visiting professor at the University of Greenwich, this latest review of the firm’s accounts shows that it has now amassed debts totalling £6.2 billion, while paying out dividends from profits worth £522 million since 2017/2018.
Over the last seven years, Yorkshire Water has paid out £2 billion in interest on debts and loans, with £1.2 billion spent on enhancement capital expenditure, including increasing storm surge capacity and the construction of new sewers. At the same time, its total debts climbed from £4.8 billion to £6.2 billion.
Professor Hall explained that this analysis indicates a growing proportion of customer bills is now being used to pay mounting debts, saying: “All water companies realised they could borrow money and use that to pay themselves dividends and that’s why the amount of debt has risen year after year.
“It’s like financial diarrhoea through the company – we pay our bills in and it goes straight out the other end without any use at all.”
According to the news source, campaign groups have been calling on Yorkshire Water chief executive Nicola Shaw to repay her £371,000 bonus from 2023, a year in which the company was fined £47 million for historical sewage spills, as well as poor customer service.
It is also of note that 87 per cent of all rivers in Yorkshire and the Humber do not meet good ecological standards, with Environment Agency figures showing that the water supplier has discharged sewage into rivers for 1.5 million hours since 2020.
Matt Payton, founder of the Friends of River Calder organisation, is one of those calling for Ms Shaw to repay her bonus, asking: “In what industry do you get to take home a bonus at the same time as running a failing business?”
Water bill increases
Industry regulator Ofwat has just this month (December 19th) published its 2024 Price Review final determinations, which will see new investment quadrupled over the next five years, with bills across England and Wales set to increase by an average of £31 per year (36 per cent) before inflation between now and 2030.
Yorkshire Water customers will see bills increase by 41 per cent, with the average customer bill set to be £607 for 2029/2030.
The investment package for the UK as a whole will focus on reducing storm overflow spills, upgrading infrastructure to tackle nutrient pollution, nature-based solutions to increase biodiversity, reservoir construction, water transfer schemes and water mains replacements.
Ofwat chief executive David Black said: “Today marks a significant moment. It provides water companies with an opportunity to regain customers’ trust by using this £104bn upgrade to turn around their environmental record and improve services to customers.
“Water companies now need to rise to this challenge, customers will rightly expect them to show they can deliver significant improvement over time to justify the increase in bills.
“Alongside the step up in investment, we need to see a transformation in companies’ culture and performance. We will monitor and hold companies to account on their investment programmes and improvements.
“We recognise it is a difficult time for many, and we are acutely aware of the impact that bill increases will have for some customers. That is why it is vital that companies are stepping up their support for customers who struggle to pay.”
How can businesses reduce water bills?
One of the best ways to go about reducing business water bills, potentially quite significantly, is to consider switching water supplier.
This process involves a water audit of your entire site so you can see how and where you’re using water, allowing us to identify the most appropriate water-saving solutions for you and your organisation.
If you’d like to find out more about switching and what it involves, get in touch with the H2o Building Services team today.