Ofwat, the water regulator for England and Wales, has launched an investigation into Thames Water after the company failed to deliver key environmental improvement projects on time.
The probe follows a Guardian report revealing that the UK’s largest water company diverted millions of pounds earmarked for environmental clean-ups toward other expenses, including executive bonuses and dividends.
Ofwat is assessing whether Thames Water breached its obligations by failing to complete 100 out of 812 environmental schemes scheduled between 2020 and 2025. These projects, part of the Water Industry National Environmental Programme (Winep), include river protection, sewage system upgrades to reduce spills, limiting water extraction from rivers, and improving designated bathing sites.
Under regulatory requirements, water companies must deliver these schemes on schedule, with enforcement action—including fines—possible for non-compliance. The Winep agreement is a condition for water companies to justify bill increases.
Lynn Parker, Ofwat’s senior director for enforcement, stated:
“Customers have paid for Thames Water to complete these essential environmental schemes. We take any indication of non-compliance seriously. Our investigation will determine whether Thames Water’s delays constitute a breach of obligations. If we find wrongdoing, we will use our full powers to hold the company accountable and ensure corrective action is taken.”
Consumer groups have raised concerns that customers in the Thames region may end up paying twice for projects already covered by their water bills.
Thames Water has been struggling with financial difficulties for months, burdened by significant debt and uncertainty over its future. Speculation continues over whether it will remain in private hands or face renationalisation.
Matthew Topham, lead campaigner at We Own It, criticized the company’s handling of funds:
“To protect shareholders and creditors, Thames Water has put public safety and the environment at risk. This proves that privatized water services can only function by shortchanging the public. Customers shouldn’t have to pay again for infrastructure they’ve already funded. Ofwat should cancel Thames Water’s planned bill increases and urge ministers to bring the company back into public ownership so it serves people, not profit.”
Thames Water dismissed claims that customers would have to pay twice and reaffirmed its commitment to its environmental pledges. In response to The Guardian’s report in December, the company attributed the project delays to sharp cost increases, including energy and chemicals, which it argued exceeded standard inflation measures.
