Thames Water is being investigated over late delivery of environmental improvement schemes, the industry regulator has announced.

Ofwat said the enforcement case against the company, currently fighting to secure its financial future amid a £19bn debt pile, aimed to determine whether it had breached its legal obligations.

The watchdog said that Thames Water itself had been in contact to alert it and the Environment Agency that it will be unlikely to deliver more than 100 of 812 improvements it had promised by a 31 March deadline.

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The schemes fall under the Water Industry National Environmental Programme (WINEP) during the current 2020-2025 pricing period.

That concludes at the end of March when Thames customers face inflation-busting increases to bills over the next five years from April to pay for further infrastructure improvements, which include widespread storm overflow upgrades to prevent sewage spills.

Lynn Parker, Ofwat’s senior director for enforcement, said: “Customers have paid for Thames Water to carry out these essential environmental schemes.

“We take any indication that water companies are not meeting their legal obligations very seriously. Therefore, we have launched an investigation to understand whether the delayed delivery of environmental schemes means that Thames Water has breached its obligations.

“If we find reason to act, we will use our full range of powers to hold Thames to account for any failures and will require them to put things right.”

The regulator ultimately has the power to fine the relevant part of the business up to 10% of its annual turnover.

Previous, and recent, penalties paid by Thames include an £18m fine in December for breaking shareholder payout rules while it was also slapped with a £104m bill last summer for sewage failings.

Thames Water is grappling with pressure over improvements to its day-to-day operations while scrambling to secure its financial future.

It has previously warned it will run out of money next month, raising the prospect of the utility entering a special administration regime, unless new financing and new equity are secured.

The company’s preferred rescue plan is currently hanging in the balance due to a High Court fight between bondholders.

Thames is also yet to confirm whether it will appeal Ofwat’s final ruling on how much it is allowed to raise bills during 2025-30.

The average water and wastewater bill across England and Wales is set to go up from £480 to £603 during 2025/26 alone – an increase of about £10 a month.

Thames Water’s 16 million customers face a 31% hike to £639 – a rise of £151.

It had sought an increase above 50% across the pricing period.

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A Thames Water spokesperson said of the investigation: “We note Ofwat’s decision to open an enforcement case into the delayed delivery of WINEP7 and will cooperate fully.

“Customers will not pay twice for investment that has already been funded through customer bills.

“We’ve been very open about the challenges of delivering all the elements of our WINEP 7 programme, which has been impacted by cost increases that are higher than the inflation index applied to our allowances. We informed Ofwat of this in August 2023.

“We remain committed to delivering all our WINEP commitments.”

The boss of Abercrombie & Fitch (A&F) has said she is “appalled and disgusted” by the sex trafficking claims against her predecessor Mike Jeffries.

Fran Horrowitz, who has led the US-based company since the departure of Mr Jeffries, signalled in an interview with Sky News that A&F had examined and transformed its culture since the scandal came to light.

She told Business Live presenter Darren McCaffrey: “We’re appalled and disgusted at the allegations.

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“What we do at Abercrombie is continue to do what we set out to do which is set the new values for the company… and keep our associates focused on that.”

Ms Horrowitz was speaking as A&F – known in its heyday for jeans and T-shirts – opened a new flagship store on London’s Oxford Street.

She expressed confidence in its more broad offering these days and the UK economy, despite the current malaise for growth amid continued weak consumer confidence.

She said she could “not be prouder” of what the retailer had become during her decade in charge.

A&F’s brand took a hit when the claims against Mr Jeffries – relating to his behaviour while running the fashion and accessories company – first emerged.

A&F began its own investigation in 2023 before an FBI inquiry was launched.

80-year-old Mr Jeffries, who led A&F from 1992 to 2014, has since pleaded not guilty to sex trafficking and interstate prostitution charges in the US.

A total of 15 men allege, in the indictment unveiled in October, that they were induced by “force, fraud and coercion” to engage in drug-fuelled sex parties.

The claims relate to the period of 2008 to 2015 and, according to the court documents, took place globally in locations including New York and London.

It emerged in December that Mr Jeffries’s legal team was questioning his fitness to stand trial on the grounds he has dementia.

Ms Horrowitz signalled in her interview that she was fully focused on continuing to lead the fightback for the brand and its evolution towards an omnichannel “lifestyle brand” aimed at women of all ages.

A&F, which is preparing its full-year results for 2024, had said following the core Christmas sales season that it expected to complete the year with net sales growth around 15% and that a turnaround plan, aimed at bolstering profitability, was significantly ahead of target.

But it has suffered a 27% decline in its share price in the year to date – with investors apparently questioning whether momentum can be maintained.

She said of her confidence in its UK operations: “The UK is our second-largest business. We’ve had terrific growth here.

“I always say despite the economic times, the customer has a choice of where to shop and they have been choosing us.”

Heathrow is set to announce a multibillion-pound expansion plan to create extra capacity at the airport – as it prepares its proposal for a third runway.

The UK’s biggest airport has announced a “once-in-a-generation investment” beginning this year to improve existing buildings and boost passenger numbers.

The development is separate from a new runway – which the government recently announced support for – and will be funded by Heathrow shareholders with airlines and customers charged for the expanded services.

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As part of the investment, the capacity of terminals two and five will be increased and the layout of the airfield will be reconfigured in a bid to improve punctuality and to increase the number of aircraft stands.

In a speech on Wednesday, chief executive Thomas Woldbye is expected to say: “This privately-funded programme will upgrade existing infrastructure while laying the groundwork for a third runway, boosting UK investment and economic growth, with tangible benefits felt this year.”

Heathrow was last month criticised by Europe’s largest airline Ryanair for being “incredibly operationally inefficient”. Because of this, Ryanair chief executive Michael O’Leary said the airline had no interest in and would “never” fly from the airport, even if it were free.

Proposals for a third runway will be submitted to the government “by summer”, the airport said, after Chancellor Rachel Reeves backed the expansion as part of her aim of growing the economy.

The support is seen as controversial as many senior Labour politicians such as London mayor Sadiq Khan and cabinet members including Energy Secretary Ed Miliband have long opposed a third runway on environmental and health grounds.

It’s unclear how the additional carbon emissions from the extra flights would be compatible with the state’s legally binding 2050 emissions reduction targets.

A third runway?

Doubt has been cast over whether a runway could even be built during Labour’s time in power. The process would have to be planned and approved before construction could begin.

Rivers and the M25 road would have to be diverted and hundreds of homes would need to be demolished as part of construction.

Ryanair’s Mr O’Leary said the chance of it being built was “slim” but it could be 2050 even if it does get built.

A question over the third runway’s ability to boost the economy was raised by left-leaning thinktank the New Economics Foundation (NEF)

According to its analysis, growth in the number of business travellers – who may grow commercial links – has ceased and instead, passenger growth has been driven by wealthy British residents rather than foreign tourists entering the country.

The air travel industry is also one of the poorest job creators in the economy per pound of revenue, the NEF said, while the environmental downsides of more flights are “significant”.

Steel pact

As part of interim, pre-third runway expansion Heathrow signed a charter to maximise opportunities for the use of British steel, a move welcomed by steel bosses, unions and the government.