Water report calls for income-linked bills and a Welsh citizens’ assembly

Water charges linked more closely to household income and a Welsh citizens’ assembly on investment priorities are among the proposals in a new report on the water industry’s finances. Foundational Economy Research, an action-research group, argues that changes to ownership or regulation need to be combined with charging reform and greater public involvement. Its October briefing examines Welsh Water and Thames Water using historical company accounts. These are the authors’ recommendations, not an announced change to customers’ tariffs.

Accounting costs are not the same as cash paid

For Dŵr Cymru, the researchers calculate cumulative finance expenses of £4.7 billion over 2001–25, against £3.4 billion in cash financing payments. The expenses measure includes both cash and non-cash interest, including inflation-linked components. That distinction matters: an expense recorded in the accounts is not necessarily a cash payment made at the same time. The totals are the research group’s calculations across the period, rather than a breakdown of a household’s current bill. They should not be added together.

What the authors want to change

The report acknowledges that Dŵr Cymru has no shareholders and pays no shareholder dividends. It argues that bond funding alone does not remove the problem of financing infrastructure renewal and services. The authors propose income-linked charging as a longer-term objective, alongside more generous support for low-income households. They also argue that public ownership or tighter regulation, on their own, would leave wider questions about revenue, investment and priorities unresolved.

A costed choice for citizens

For Wales, the group calls for a costed “bill of works” showing different investment options, their likely outcomes and the trade-offs involved. It proposes a citizens’ assembly, advised by experts, to discuss those choices. Other suggestions include a water observatory involving civil society and independent expertise, and a standing Senedd committee with resources to examine financial and environmental performance. The report does not set a new bill for an individual household or announce that these bodies will be established. Its evidence is an analysis of past accounts and a case for reform, rather than a new regulatory finding or independent audit.