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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.

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Water bills ‘an absolute disgrace’

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.”

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UK’s biggest housebuilders to pay record sum after CMA investigation into sensitive information-sharing

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UK's biggest housebuilders to pay record sum after CMA investigation into sensitive information-sharing

The UK’s biggest housebuilders are set to pay a record sum to fund affordable housing after the competition regulator investigated sensitive information sharing among the firms.

A total of £100m, paid for by seven companies, will go to affordable housing programmes across England, Scotland, Wales and Northern Ireland, following a Competition and Markets Authority (CMA) investigation.

The inquiry was launched last year due to concerns that the companies were sharing commercially sensitive information, which could influence the prices of new homes.

There was concern that the housebuilders – Barratt Redrow, Bellway, Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry – exchanged details about property sales, including pricing, viewing numbers and buyer incentives such as upgraded kitchens or stamp duty contributions.

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It’s resulted in an agreement to make the combined £100m payment – the largest secured via a commitment from companies under CMA investigation. Hundreds of new homes could be funded with the money, the CMA said, helping low-income households, first-time buyers and vulnerable people.

The businesses have voluntarily agreed to pay the sum and have not acknowledged wrongdoing. No finding of rule-breaking or illegality has been made.

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What next?

They have also offered to sign up to legally binding commitments to prevent anticompetitive behaviour.

Among the proposals advanced by the companies was an agreement not to share some information, like prices houses were sold for, with other housebuilders, except in limited circumstances, and to work with the Home Builders Federation and Homes for Scotland to develop industry-wide guidance on information sharing.

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The CMA has said it will consult on the changes.

If accepted, the commitments will become legally binding, and the CMA will not need to decide whether the housebuilders broke competition law.

Initially, eight companies were under investigation, but following a merger of Barratt Homes and Redrow, the number became seven.

“Housing is a critical sector for the UK economy and housing costs are a substantial part of people’s monthly spend, so it’s essential that competition works well. This keeps prices as low as possible and increases choice,” the CMA chief executive, Sarah Cardell, said.

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At least 13 people may have taken their own lives linked to Post Office scandal, public inquiry finds

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At least 13 people may have taken their own lives linked to Post Office scandal, public inquiry finds

At least 13 people may have taken their own lives after being accused of wrongdoing based on evidence from the Horizon IT system that the Post Office and developers Fujitsu knew could be false, the public inquiry has found.

A further 59 people told the inquiry they considered ending their lives, 10 of whom tried on at least one occasion, while other postmasters and family members recount suffering from alcoholism and mental health disorders including anorexia and depression, family breakup, divorce, bankruptcy and personal abuse.

Follow latest on public inquiry into Post Office scandal

Writing in the first volume of the Post Office Horizon IT Inquiry report, chairman Sir Wyn Williams concludes that this enormous personal toll came despite senior employees at the Post Office knowing the Horizon IT system could produce accounts “which were illusory rather than real” even before it was rolled out to branches.

Sir Wyn said: “I am satisfied from the evidence that I have heard that a number of senior, and not so senior, employees of the Post Office knew or, at the very least, should have known that Legacy Horizon was capable of error… Yet, for all practical purposes, throughout the lifetime of Legacy Horizon, the Post Office maintained the fiction that its data was always accurate.”

Referring to the updated version of Horizon, known as Horizon Online, which also had “bugs errors and defects” that could create illusory accounts, he said: “I am satisfied that a number of employees of Fujitsu and the Post Office knew that this was so.”

The first volume of the report focuses on what Sir Wyn calls the “disastrous” impact of false accusations made against at least 1,000 postmasters, and the various redress schemes the Post Office and government has established since miscarriages of justice were identified and proven.

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‘It stole a lot from me’

Recommendations regarding the conduct of senior management of the Post Office, Fujitsu and ministers will come in a subsequent report, but Sir Wyn is clear that unjust and flawed prosecutions were knowingly pursued.

“All of these people are properly to be regarded as victims of wholly unacceptable behaviour perpetrated by a number of individuals employed by and/or associated with the Post Office and Fujitsu from time to time and by the Post Office and Fujitsu as institutions,” he says.

What are the inquiry’s recommendations?

Calling for urgent action from government and the Post Office to ensure “full and fair compensation”, he makes 19 recommendations including:

• Government and the Post Office to agree a definition of “full and fair” compensation to be used when agreeing payouts
• Ending “unnecessarily adversarial attitude” to initial offers that have depressed the value of payouts, ⁠and ensuring consistency across all four compensation schemes
• The creation of a standing body to administer financial redress to people wronged by public bodies
• Compensation to be extended to close family members of those affected who have suffered “serious negative consequences”
• The Post Office, Fujitsu and government agreeing a programme for “restorative justice”, a process that brings together those that have suffered harm with those that have caused it

Regarding the human impact of the Post Office’s pursuit of postmasters, including its use of unique powers of prosecution, Sir Wyn writes: “I do not think it is easy to exaggerate the trauma which persons are likely to suffer when they are the subject of criminal investigation, prosecution, conviction and sentence.”

He says that even the process of being interviewed under caution by Post Office investigators “will have been troubling at best and harrowing at worst”.

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‘Hostile and abusive behaviour’

The report finds that those wrongfully convicted were “subject to hostile and abusive behaviour” in their local communities, felt shame and embarrassment, with some feeling forced to move.

Detailing the impact on close family members of those prosecuted, Sir Wyn writes: “Wives, husbands, children and parents endured very significant suffering in the form of distress, worry and disruption to home life, in employment and education.

“In a number of cases, relationships with spouses broke down and ended in divorce or separation.

“In the most egregious cases, family members themselves suffered psychiatric illnesses or psychological problems and very significant financial losses… their suffering has been acute.”

The report includes 17 case studies of those affected by the scandal including some who have never spoken publicly before. They include Millie Castleton, daughter of Lee Castleton, one of the first postmasters prosecuted.

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Three things you need to know about Post Office report

She told the inquiry how her family being “branded thieves and liars” affected her mental health, and contributed to a diagnosis of anorexia that forced her to drop out of university.

Her account concludes: “Even now as I go into my career, I still find it so incredibly hard to trust anyone, even subconsciously. I sabotage myself by not asking for help with anything.

“I’m trying hard to break this cycle but I’m 26 and am very conscious that I may never be able to fully commit to natural trust. But my family is still fighting. I’m still fighting, as are many hundreds involved in the Post Office trial.”

Business Secretary Jonathan Reynolds said the inquiry’s report “marks an important milestone for sub-postmasters and their families”.

He added that he was “committed to ensuring wronged sub-postmasters are given full, fair, and prompt redress”.

“The recommendations contained in Sir Wyn’s report require careful reflection, including on further action to complete the redress schemes,” Mr Reynolds said.

“Government will promptly respond to the recommendations in full in parliament.”

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Public finances in ‘relatively vulnerable position.’, OBR warns

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Public finances in 'relatively vulnerable position.', OBR warns

The UK’s public finances are in a “relatively vulnerable position”, the government’s official forecaster has warned.

The Office for Budget Responsibility (OBR) cited a drag from successive economic shocks, recent U-turns on spending cuts and higher-than-expected policy commitments.

It sounded alarm over the projected path for debt as a result, in its annual fiscal risks and sustainability report.

It saw total debt above 270% of gross domestic product (GDP) by the early 2070s – up from a current level of 96.5% – declaring that rising debts have led to “a substantial erosion of the UK’s capacity to respond to future shocks”.

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The OBR’s report highlighted damage from the COVID pandemic and cost of living crisis that followed Russia’s invasion of Ukraine.

But it raised fears that past and current government policies were further harming the sustainability of the public finances.

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The report said that the pension triple lock, for example, was now estimated to cost £15.5bn annually by 2029-30.

That was “around three times higher than initial expectations”, it said.

The lock, which rises each year in line with inflation, wage growth or 2.5% – whichever is higher – had risen by more than the 2.5% base in eight of the 13 years of operation to date, the report stated.

The watchdog said it reflected more volatile inflation than expected.

It also picked up on the latest government U-turns over planned welfare and winter fuel payment cuts in the face of rebellions by Labour MPs.

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Welfare U-turn ‘has come at cost’

The decisions are expected to leave Chancellor Rachel Reeves facing a black hole of £6.75bn while weaker-than-expected economic growth could add a further £9bn to that sum in the run-up to the autumn budget, according to Sky News projections that see a void of around £20bn.

The OBR highlighted future risks from rising defence spending and the impact of climate change.

Public sector pay demands could also prove a drag, with resident doctors voting in favour of strikes over pay.

While ministers acknowledge damage to the public purse from the U-turns, Ms Reeves has repeatedly ruled out a new wave of borrowing to fund a spending spree.

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Could the rich be taxed to fill black hole?

As such, the government has not ruled out the prospect of some form of wealth tax to help meet its commitments despite the top 1% of earners contributing almost a third of all income tax already – on top of other targeted taxes such as capital gains.

The report said: “Efforts to put the UK’s public finances on a more sustainable footing have met with only limited and temporary success in recent years in the aftermath of the shocks, debt has also continued to rise and borrowing remained elevated because governments have reversed plans to consolidate the public finances.

“Planned tax rises have been reversed, and, more significantly, planned spending reductions have been abandoned.”

Shadow chancellor Mel Stride said of the report: “The OBR’s report lays bare the damage: Britain now has the third-highest deficit and the fourth-highest debt burden in Europe, with borrowing costs among the highest in the developed world.

“Under Rachel Reeves’ economic mismanagement and Keir Starmer’s weak leadership, our public finances have become dangerously exposed – vulnerable to future shocks, welfare spending rising unsustainably, taxes rising to record highs and crippling levels of debt interest.

“Labour’s recklessness risks it all – your pension, your job, your home, your savings.”

A Number 10 spokesman said: “We recognise the realities set out in the OBR’s report and we’re taking the decisions needed to provide stability to the public finances.”

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