Thames Water’s confrontation with Ofwat could worsen its already poor public standing
April 16th, 2024, Stephan Shakespeare

Thames Water’s confrontation with Ofwat could worsen its already poor public standing

Thames Water’s lobbying to increase customer bills by some 40% have led to a standoff with water regulator Ofwat, and now faces a rising tide of criticism. The backlash comes from sources as wide-ranging as communities secretary Michael Gove, who described its leadership as “a disgrace”, and the GMB Union, which accused it of “essentially blackmailing” customers. At the same time, the utility provider saw investors refuse to provide £500m in emergency funding, sparking speculation about a possible nationalisation of the company.

The public would perhaps respond negatively to a well-liked brand proposing a 40% uptick in bills, but Thames Water is already not a very well-liked brand. YouGov BrandIndex data shows that net Impression scores, which measure general sentiment towards a company, are at 1.5 for the utilities sector on average – a score that, even against the backdrop of the cost-of-living crisis, means the overall industry is more liked than not even if by a slim margin. Thames Water, by contrast, has firmly negative scores of -16.5 as of our most recent data.

Looking at Value for Money scores tells a similar story. For the industry, these sit at -1.8. But for Thames Water, these scores plummet to the depths of -15.1. Consumers don’t have a sense that the company provides a good service, either: while Quality scores for the sector are, on average, positive (1.7), the beleaguered water brand’s scores are much worse (-13.3). Headlines around raw sewage discharges in the nation’s bodies of water may have had an effect here.

Reputation scores, which measure pride or embarrassment at the prospect of working for a brand, sit at 0.3 for the sector; for Thames Water, they are -13. The company may console itself that its customer Satisfaction scores are relatively better at -0.9, compared to 3.4 for the sector – but they are still negative overall.

So, there may be real risk for Ofwat in allowing a company this unpopular to charge higher bills, and for the government, they may be similar risks in capitulating to its lobbying efforts – or bailing it out.

This article originally appeared in City A.M.