UK Water Companies Pocketed £800m by Not Passing on Tax Cuts

By Gary Cutlack on at

The National Audit Office, a sort of UK pocketmoney checker, has found that water regulator Ofwat has made a mess of dealing with the water companies -- letting them bank an extra £800m over the last few years.

The mistakes, according to the NAO, were that tax cuts weren't passed on, plus the incredibly low cost  of debt the country's seen over the last few years has also let the water company's borrow on the cheap -- and again not pass on the savings made to the customer by reducing bills.

The National Audit Office explains that: "The NAO estimates that water companies made net windfall gains of at least £800 million between 2010 and 2015; companies gained around £410 million from lower than expected corporation tax rates and £840 million from lower than expected interest rates, but absorbed costs and provided water bill discounts worth up to £435 million over the same period."

Leaving £800m of free magically appearing money that never seems to hit our accounts. That said, had interest rates gone up, the NAO estimates that water companies may have booked a loss on the deal over the same period, so it's unlikely any bodies will end up being dumped in any reservoirs due to the errors of financial balancing. [NAO via BBC]

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