29 June 2023 , 12:36
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Water firms are lumbered with more than £60billion of debt - at least half of it exposed to soaring inflation.
Those figures, published by industry regulator Ofwat, date from March 2022.
Since then, inflation has risen even higher, potentially driving firms’ interest bills skyward.
The total amount of borrowings jumped by £1.26billion to £60.56billion between 2021 and 2022.
Of that, £29.1billion is linked to the Retail Price Index measure of inflation.
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RPI stood at 11.3% last month, hence the risk of higher borrowing costs for suppliers.
Ofwat’s figures showed Thames Water, now threatened with collapse, had the biggest debt mountain, at almost £14billion.
Former CEO of Thames Water, Sarah Bentley who stepped down weeks after being forced to give up her bonus over the company's environmental performance (John Alex Maguire/REX/Shutterstock)Around 56% of its borrowers were, at the time, linked to RPI.
Another measure of firms’ debts is what is called “regulatory gearing”.
In 2019, Ofwat set it at 60% for five years.
But its data from last March showed most firms were above that threshold.
It will get even tougher for suppliers as Ofwat is proposing to reduce the level to 55% over the next five years.
Here’s how much debt your water firm is sitting on:
Emergency plans are reportedly being drawn up to save the debt-laden Thames Water (Corbis via Getty Images) - Thames Water
Total debt: £13.84billion
Linked to RPI: £7.76billion (56.1%)
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- United Utilities
Total debt: £8.17billion
Amount linked to RPI: £3.12billion (38.2%)
- Anglian
Total debt: £6.6billion
Amount liked to RPI: £3.5billion (53%)
A Thames Water official stands in flood water on Hornsey Road, Holloway, north London, after a 36-inch water main burst, causing flooding up to four feet deep (PA) - Severn Trent
Total debt: £6.35billion
Amount linked to RPI: £1.03billion (16.2%)
- Yorkshire
Total debt: £5.64billion
Amount linked to RPI: £3.12billion (55.4%)
Regulatory gearing: 72.5%
- Dŵr Cymru (Welsh Water)
Total debt: £4.19billion
Amount linked to RPI: £3.48billion (83%)
Campaigners from Extinction Rebellion Wallingford and the Dirty Water Campaign were in Henley during the Royal Regatta to protest Thames Water sewage discharges into the River Thames (Maureen McLean/REX/Shutterstock) - Southern
Total debt: £4.1billion
Amount linked to RPI: £2.6billion (63.4%)
- Northumberland
Total debt: £3.17billion
Amount linked to RPI: £1.08billion (34.1%)
- South West Water
Total debt: £2.5billion
Amount linked to RPI: £552million (22.1%)
Water firms have come under repeated fire for pumping sewage into the country's waterways - a storm overflow at a beach in Worthing, West Sussex (Adam Gerrard / Daily Mirror) - Wessex
Total debt: £2.42billion
Amount linked to RPI: £836million (34.5%)
- Affinity
Total debt: £1.3billion
Amount linked to RPI: £614million (47.5%)
- South East
Total debt: £1.13billion
Amount linked to RPI: £611.6million (54.3%)
- Bristol
Total debt: £412.6million
Amount linked to RPI: £206.5million (50.1%)
- South Staffordshire
Total debt: £292.7million
Amount linked to RPI: £241.2million (82.4%)
- SES Water
Total debt: £234.9million
Amount linked to RPI: £175.2million (74.6%)
- Portsmouth
Total debt: £164million
Amount linked to RPI: £116.6million (71.1%)
- Hafren
Total debt: £36.7million
Amount linked to RPI: £33million (89.8%)
Total for industry
Total debt March 31, 2022: £60.56billion
Total debt March 31, 2021: £59.3billion
Amount linked to RPI March, 2022: £29.1billion
Amount linked to RPI March, 2021 £27.9billion
(Source: Ofwat)