Can Thames Water executives be held to account?

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StatisticianOwn9953@reddit

I don't understand why they haven't privatised all the rest of our core infrastructure. Make every road a toll road. Have a pay-per-use fire brigade. Bring back debtors prisons. If you don't use these things then you shouldn't have to contribute to their use. If you don't have the capital to be a stakeholder, then you deserve to be a pleb. Unburden the treasurey and get some efficiency in this bitch.

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EpochRaine@reddit

>I don't understand why they haven't privatised all the rest of our core infrastructure and services Because they are all massive companies, the effect will be to remove those companies from the private sector. Contracting it even more, and massively expanding the civil payroll, as all the employees become state employees with all the actuarial impact to the public finances that will entail. We have a shit economy right now. Now is not a great time economically to be nationalising industries. That is why they are letting them "fail" into nationalisation.

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ThinkAboutThatFor1Se@reddit

The whole system is designed by politicians so that people complain about faceless corporations rather than about politicians who fail to invest in critical infrastructure.

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munyangsan@reddit

These things are likely to still tend to be 'sorted out' on the golf course, which is code for doing fuck all.

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B4DM4N12Z@reddit

Greed is a hell of a drug

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minisrugbycoach@reddit

So now they fine them, oh however will Themes water pay the fine? I know, charge more to the customer or spend less on upkeep of the water systems. The bill payer doesn't see any of the money from these fines, so the only winners are the government agencies that get a nice Christmas party paid for by Themes Water. Whilst us punters pay more.

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TheOldBean@reddit

The inevitable conclusion is for these companies to be nationalised. Critical infrastructure that has no competition should not be in the hands of private companies.

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PharahSupporter@reddit

Probably yeah but ultimately the taxpayers (us) will have to pay for it and it isn't cheap. They need £20bn+.

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skyjet26@reddit

If it remains privatised i'm sure the taxpayer is going to end up paying for it anyway through a subsidy or bailout. Best to nationalise it and avoid thames water wrecking their finances even further

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Important_Ruin@reddit

I think I'd prefer it. Should use any remaining monies company to invest into system though will be drop in ocean to what is needed as investment has been ignored for 4 decades as these are costs which effect bonuses and dividends and private companies won't invest unless 100% have to. Unfortunately tax payer if nationalised is going to have huge bill to pick up in fixed neglected infrastructure but I think public would want to see a working infrastructure system, we bailed out the banks, bailed out country during covid, handed billions out on PPE and dodgy test and trace and H2S. Money is there, just a case of spinning public opinion towards it because private sector has failed on this major infrastructure, and they can't be trusted. Bonus is any profits will be put back into government pockets instead of private shareholders.

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dave_gregory42@reddit

I agree. I think this is one of the things we (the govt and taxpayers) might just have to suck up. A significant majority of the public is already [in favour of nationalising utilities and transport](https://yougov.co.uk/politics/articles/50098-support-for-nationalising-utilities-and-public-transport-has-grown-significantly-in-last-seven-years), so I think it would be a political win.

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Important_Ruin@reddit

I'd much prefer my taxes go to nationalisation of water/rail instead of what it's been pissed up wall previously with PPE, Test and Trace, Rwanda.

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InspectionLow5303@reddit

The Directors should be in jail and struck off the companies house register and never be allowed to run a company again

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Glittering-Sink9930@reddit

What crimes have they committed?

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InspectionLow5303@reddit

Dumping contaminated water into our rivers/streams I'm sure they have some misuse of company finances If not, make something up

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Glittering-Sink9930@reddit

InspectionLow5303@reddit

Well, it was a bit of a stupid question, as I'm not investigating them. But we should send in forensic accounts, especially when the taxpayer will have to bail them out eventually

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NevilleLurcher@reddit

They're a private company so, buy some voting shares, rally fellow shareholders and attempt a rebellion at the AGM where executive remuneration is voted upon.

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Glittering-Sink9930@reddit

They aren't a public company. You can't buy shares.

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AlmightyRobert@reddit

Private means the shares aren’t publicly available.

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NevilleLurcher@reddit

Ta - only a tiny difference between the two!

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AlmightyRobert@reddit

You were right the first time. They are private. They were public for a short time but bought and taken private in 2001.

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scrapheaper_@reddit

The problem is that Thames Water still needs a whole load of money and better quality staff to make itself less dysfunctional How is the company supposed to get better if the government keeps punishing it? The beatings will continue until morale improves

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TheOldBean@reddit

The company shouldn't get better. It should be nationalised.

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scrapheaper_@reddit

Doesn't make any difference IMO - still needs a bunch of money throwing at it either way. If we nationalize it it's going to be the same people running it either way, and the same people paying for it, the only difference is whether the bill comes from HMRC or Thames Water

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TheOldBean@reddit

It makes a massive difference. The difference being the primary goal is no longer to make a profit for their shareholders. The only goal is to provide water to the citizens. Period. 10 billion pounds has been paid out to shareholders in the last decade. The latest rough estimate for the investment needed in UK water? 10 billion. Coincidence? It's time water "companies" started actually providing the services we pay them for. The only way to do that is cut out the parasitic shareholders and transform the culture from a money making business to a societal service. It won't be cheaper for tax payers but we'll get what we pay for. We're currently being scammed. I understand what you're saying, and sure people who work at Thames water would probably still be involved if it was nationalised but the senior leadership would be different and accountable to the public.

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scrapheaper_@reddit

You're implying that it's the senior leadership that makes a difference. I think it's the past 20 years of being stingy with water bills that makes a difference, so if we have another 10 years of being stingy under a cash strapped government it won't help. The whole thing is politicized to hell, people care more about seeing blood and suffering of whoever was responsible (and I think it's more likely to be OFWAT than the water company itself) than they do about fixing the problem If people just accepted they have to pay an extra £5 a month on their bills to compensate for the bills being too cheap in 2015 and calmed down the problems would easily go away.

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TheOldBean@reddit

You seem to think that bills over the years wouldn't have covered the costs? When they absolutely would have if the priority wasn't shareholder dividends. The bills weren't too cheap in 2015, that's the point. We're being stung with heavy increases now because the companies have been criminally under investing in infrastructure over the years in the name of profits.

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scrapheaper_@reddit

The way privatisation works is that the shareholders loan a huge chunk of cash to the company to get it to fix stuff and then charge interest. The water company absolutely needed the loan, so it has to pay the interest. In fact they wanted to take a bigger loan and pay more interest (which might have prevented this mess) but OFWAT said no. You could argue that maybe it's being ripped off for interest, but if no-one wants to loan the money because the company is a dysfunctional piece of crap, then you don't have much choice.

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TheOldBean@reddit

I know that's how it works and it's fundamentally broken. With something like water infrastructure there's no reason why the government shouldn't just invest the money upfront and collect it back from taxes. That's literally what taxes are for. Water is kinda important but the Thatcher regime didn't think it through. (like a lot of things they sold off). We need a full reversal of their shit privatisation policies.

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FewEstablishment2696@reddit

Business does what it does, extract value for shareholders. I'd like to see the highly paid senior leaders of OFWAT held to account for allowing Thames Water to accrue massive debt whilst paying huge dividends.

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getroastes@reddit

I'm so glad someone is saying this. Businesses will always try to extract value for shareholders, that is what the insetivised to do. It's up to the government and government bodies to incentivize companies to do what's in the publics interest.

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OneDropOfOcean@reddit (OP)

Good point, why on earth didn't OFTWAT step up far sooner. It was clear that Thames Water wasn't investing the money where it needed to be, and was also paying dividends and bonuses.

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AffectionateJump7896@reddit

The thing that I find strange is why we aren't letting Thames water fail. Investors have invested in ownership, taking risk. Sometimes you get to sell your shares on and sometimes you run the company into the ground extracting profits until it fails. So now it's failed and another buyer (perhaps the state or another private investor) should be buying up the assets for pennies on the pounds. The shareholders lose everything, and the creditors (who have been earning interest) get back the pennies on the pound.

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PharahSupporter@reddit

I think a big issue here is that it's failure would be unnatural. The government caps the price of water that they can charge. So in essence the government would be forcing it into failure by not lifting this cap which looks very bad both domestically and internationally. It spooks businesses and investment this country desperately needs. That said allowing it to charge what it needs would be very unfair on consumers due to the monopoly nature of water companies, it's not like you can switch.

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randomwalk93@reddit

I thought the shareholders were being wiped out? With debt also taking a write down?

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OneDropOfOcean@reddit (OP)

I'd guess it's either due to pension funds having invested in it, or that the government is lining up things in the background to nationalise it properly, but isn't quite ready.

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FewEstablishment2696@reddit

Shareholders lost their shirts when the govt bailed out Lloyds. I don't think that's the reason.

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TrashbatLondon@reddit

>I'd guess it's either due to pension funds having invested in it, Bingo. Same with the shambles that is “competitive” energy suppliers. >or that the government is lining up things in the background to nationalise it properly, but isn't quite ready. Not this government.

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FewEstablishment2696@reddit

Do Thames Water customers lose the money they have on their credit balances?

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PharahSupporter@reddit

Its because not paying dividends had the potential to make it worse, as that could potentially hurt the share price even more and make new rounds of investment less likely. Investment they desperately need. Either way it seems like Thames Water is screwed currently, they legally can't charge more to customers due to price caps and they also need approx £20bn+ to pay their debts and get investment to fix aging infrastructure, which they cannot afford even if they'd never given a single dividend or bonus etc since it was privatised. It has just barely been trying to drag itself onwards and unfortunately that just isn't enough.

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liquidio@reddit

Investment wasn’t the problem. Thames Water has made all the investments that OFWAT asked for and permitted. People don’t seem to understand that OFWAT completely controls capital expenditure in the sector. As for debt load - yes Thames Water took it too far. This is a problem for the shareholders who are risking being wiped out, or a severe dilution in any restructuring at the least. Talking of accountability, the shareholders have already paid a price for it; since 2021 the share price has halved. It has not affected customers.

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Huge-Brick-3495@reddit

There is probably a revolving door between Thames and OFTWAT

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jimicus@reddit

Never worked for a large organisation? The whole point is that no single person does anything. No single person takes decisions, no single person decides policy. I can’t even buy a computer mouse without it going through a dozen different people. Which means no single person is accountable.

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Freebornaiden@reddit

Or everybody is accountable like in organised crime cases.

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Roper1537@reddit

perhaps we customers could all organise a poo-in where we go to their corporate HQ and poo in the lobby.

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Munsteroyal@reddit

Please don’t, the traffic in Reading is bad enough 😂 Can we all just flush at the same time?

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sudwald@reddit

Breaching a contract and breaking the law aren’t the same things, the former is a civil matter although it’s murkier in a government contract. Government contracts will carefully outline the implications for failing to fulfil and/or breaching contract terms, and franchises sign up to this, hence the record fine today. Breaching a contract and breaking the law aren’t the same things, the former is a civil matter although it’s murkier in a government contract. Government contracts will carefully outline the implications for failing to fulfil and/or breaching contract terms, and franchises sign up to this, hence the record fine today. It’s the company that is punished; if individual executives were responsible for that breach of contract then it’s the company’s choice as to whether to discipline/fire them for being out of line, or if they were in line because the company’s strategy was to push the envelope as much as possible and just hope they didn’t get caught, then tbh nothing will happen. They don’t get their bonus. It’s the company that is punished; if individual executives were responsible for that breach of contract then it’s the company’s choice as to whether to discipline/fire them for being out of line, or if they were in line because the company’s strategy was to push the envelope as much as possible and just hope they didn’t get caught, then tbh nothing will happen

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SirResponsible@reddit

>Government contracts will carefully outline the implications for failing to fulfil and/or breaching contract terms They should do this, but, in most cases, they don't. In addition, even if this is all outlined, it doesn't guarantee that such terms will be enforced. Enforcing contracts can be incredibly expensive, especially since if a contractor fails to deliver under a contract, they won't just admit fault. Rather, they will find ways to muddy the waters to try and demonstrate that government actions played a part in the failure. If they can do this, liquidated damages are almost certainly out of the question, and it's suddenly become more expensive to resolve - i.e., likely that if we wanted to recover money, we'd have to do it throigh the courts, which comes with huge costs and risk of losing and having to pay the other side's legal fees. Source: work in government procurement.

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pip_goes_pop@reddit

If you want to get really wound up about it, listen to the Water UK CEO David Henderson whenever interviewed by Radio 4. He will not accept the water companies have any blame whatsoever and insists they're all hard done by. It's infuriating, he says it in such a smug way too.

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publicOwl@reddit

It’s not just Thames Water. I’ve never lived anywhere with a water company I can be remotely proud of or happy with, I’ve lived all over the country. The fact that we have local monopolies on water supply is fucked.

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NagromNitsuj@reddit

I think the whole system is designed with fraud in mind. That's why there's never any accountability.

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ThinkAboutThatFor1Se@reddit

The whole system is designed for people to complain about faceless corporations rather than about politicians who fail to invest in critical infrastructure.

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Adventurous_Rock294@reddit

They should be held personally responsible for all the money they rake in for themselves.

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Cultural-Pressure-91@reddit

It’s hilarious that the government announce massive fines on them - when it essentially the British taxpayer who will end up paying them. The executives and shareholders will be fine.

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Twiggy_15@reddit

Thames Water needs to be nationalised and with a £0 purchase price from the government (the debt can be negotiated but ultimately paid). But taking money from the execs is much harder than people think. The problem is as soon as you mess with the award of the top brass then you will just continue to get junk in those positions. Ultimately this becomes a self fulling prophecy.

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OneDropOfOcean@reddit (OP)

Perhaps I'm being naive, but would the contract between the private company and the government who awarded them that contract not state that x needs to be achieved, or y needs to be performed as part of the running of it's organisation before profits can be extracted... If the details of the contract are not abided by and bonuses/dividends are still paid... is that not fraud? If fraud, then fines and prison sentences is what normally happens to people/companies is it not..

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palpatineforever@reddit

also have another one for your list. [https://riveractionuk.com/news/your-chicken-is-killing-our-rivers-british-icons-take-on-nandos-over-supply-chain/](https://riveractionuk.com/news/your-chicken-is-killing-our-rivers-british-icons-take-on-nandos-over-supply-chain/)

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palpatineforever@reddit

Contract law is civil law not criminal law so things like prison are not an option. You can give fines for not delivering on a contract however it would need to be in the contract terms. as in if is not called out there you can't easily do them for it. There are criminal offenses related to pollution which might be used for water companies who are discharging excessive sewage. they would need to prove it people knew about it and when and that it was not within the scope of what they were allowed to do. for context I 100% agree with you and understand. I am an open water swimmer so yeah, I would like to see thames water and other companies held responsible for the enviormental disaster they are currently undertaking. So many beaches that used to have good swimmable water have been downgraded to no swimming as a result of years of dumping sewage, rivers and chalk streams are dead from the toxins. This doesn't just hurt the wildlife but peoples livelyhoods are ruined, people generally dont visit beaches where you can't go in the water. or travel to talk nice walks along muddy dead streams.

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Twiggy_15@reddit

I'm not an expert on the contracts, but for sure they have service deliverables and minimum requirements, its just a case of what the punishments are for breaking these. As per the article, its most likely fines, but these are almost impossible not to just pass on to the customer. You can make punishments linked to exec pay, but whats to stop the exec just quitting and then you finding it impossible to get anyone competent in as you advertise a role saying we can't offer competitive pay due to recent poor performance. Likewise, you can stop dividends happening, as they have done in the article, but thats almost completely pointless. Don't pay dividends now, save the money and pay when you can, in the meantime the shareholder benefits from capital gain anyway so its almost the exact same. My summary is... don't privatise water!.. like seriously, its as essential as you can get and requires a monopoly because of the infrastructure. I can see literally no benefit to it being private.

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palpatineforever@reddit

Difficult, proving exactly what they knew when is hard. It would be easier to hold the company accountable and they struggle to do that. It would probably be simpler to use civil laws where they could implement things preventing them from sitting on company boards in the future. Seems too little but this would hit their earnings significantly. Maybe ask the legal uk sub if there is a way to do this. the problem is civil law would need someone to instigate it.

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davus_maximus@reddit

The whole point of a corporation is individual profit without individual responsibility.

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TheToolman04@reddit

My water bill went from £36, to £49 a month, about 6 months or so ago. We got this months bill in at £83pcm. That's a 130% increase in under a year.

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spacetimebear@reddit

Didn't the whole senior leadership team just give themselves massive bonuses? I don't think they're going to be held to account to anything.

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TheToolman04@reddit

As part of the £3Bn loan from the government (our pockets) those bonuses were stopped, saving a fair amount of money but not enough imo. I would go further and stop them from getting dividends as well but that's a bit more difficult as they'd just rename the payments or whatever.

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StatisticianOwn9953@reddit

Accountability is for plebs.

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