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Thames Water racks up £50m in penalties amid ‘unacceptable’ performance

Water companies are given penalties or rewards based on how they perform.

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Thames Water has promised improvements over coming years (Martin Keene/PA)

Thames Water has promised improvements over coming years (Martin Keene/PA)

Thames Water has promised improvements over coming years (Martin Keene/PA)

Thames Water notched up penalties of around £50 million last year as the business performed poorly on customer experience and flooded sewers.

The utility company said it had been handed £51.9 million in penalties, while only getting rewards of £3.27 million.

Water companies that have monopolies in their local area are given rewards or penalties based on their performance, under criteria agreed with regulator Ofwat.

Our broader business performance against some of our key commitments has been unacceptable Sarah Bentley, Thames Water

Thames Water said it had met 26 of the 49 performance commitments that were assessed this year.

An update to shareholders said the company has set targets for the five years to 2025, but has fallen behind on meeting them.

“Through the business planning process, we were set very challenging targets for some of our performance commitments and we put plans together to make headway towards our goals. However, we’re behind where we planned to be at the end of year one and we know that’s unacceptable,” it said.

The business swung to a £198.5 million after-tax loss, from a £244.6 million profit the year before. Revenue dipped from £2.2 billion to £2.1 billion.

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We're absolutely determined to learn from our mistakes and to improveSarah Bentley, Thames Water

Chief executive Sarah Bentley said: “I’m incredibly proud of how our key workers stepped up to keep our essential service running during a year like no other in living memory.

“As the pandemic hit our region, our priorities became clear – to focus on keeping water flowing and supporting our customers as much as possible.

“Despite these brilliant efforts, our broader business performance against some of our key commitments has been unacceptable and we are behind expectations – causing an increase in customer complaints.

“We’re absolutely determined to learn from our mistakes and to improve.”


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