Thames Water in deal on data error

Thames Water, the UK's biggest water company, has agreed to an £86 million financial settlement over the misreporting of sewer flooding data.

Thames Water misreported data regarding the risk of sewer flooding
Thames Water misreported data regarding the risk of sewer flooding

The sum will largely be made up of a £79 million regulatory accounting write-down, expected to result in £15.2 million being shaved off bills over the next five years, regulator Ofwat said.

However the impact for customers will be less than £1 a year off charges.

Thames will also pay £2 million into the independently-managed Thames Water Trust Fund to help customers struggling to pay bills, and £5 million to support community projects including schemes to protect rivers and the environment.

Ofwat said its investigation related to Thames misreporting the number of properties at high risk of sewer flooding between 2005 and 2010.

"This meant that more properties were recorded at higher risk of sewer flooding than there was evidence to support," it said.

"The misreporting may have led to poorly targeted and inefficient spending of customers' money. But there was no evidence of deliberate misreporting."

The regulator said Thames did not put any homes at risk and that its programme "did reduce the risk of sewer flooding at the homes of a large number of its customers".

Ofwat chief executive Cathryn Ross said: "We are satisfied that Thames has put right the problems that caused the misreporting. It's only fair that when companies make mistakes, they put it right and make sure customers are not out of pocket."

Thames said: "We made a mistake in some of our 2009/10 sewer flooding statistics. Ofwat agree that this was not deliberate and we are pleased they have accepted our package of measures in response.

"This is a positive result for our customers, communities and the environment."

Thames serves about 14 million customers in and around London.

In 2008, it was fined £9.7 million by the regulator for misreporting financial information and poor service. In 2006, it was told to spend an extra £150 million on improvements after failing to meet its leakage target.

Thames said last December that it wanted to raise bills by more than 10.4% over the cost of inflation over the 2015-2020 period because of its plans to invest £2.8 billion in the Thames Tideway Tunnel, a major new sewer.

Ofwat will issue its final decision on this and other companies' five-year plans at the end of this year.

Thames last year had an application to add £29 to customers' bills for 2014, because of unforeseen costs, rejected by Ofwat.

Its tax arrangements have also been controversial. It has said it does not expect to pay any more corporation tax for up to a decade, as investments of £1 billion a year enable it to defer liabilities.