WELSH WATER is a not-for-profit company that claims to be run solely for the benefit of customers.
Until 2010, this claim had considerable validity.
Between 2004 and 2010 the company returned £150 million to customers in the form of a “customer dividend”.
In 2010 the company axed the dividend and ploughed the money into reducing its debt and accelerating investment in infrastructure.
WEAK GOVERNANCE
ALTHOUGH WELSH WATER claims it is operated “solely” for customers, the fact is consumers have no say in running the business. The company is controlled by the board and a small number of so-called “members”. The latter are chosen from among the ‘great and the good’ by a committee itself chosen by the company. There are no representatives from employees, unions, local authorities or community groups. The members are unpaid, meet only a few times a year, have no staff of their own and are dependent on the board for information.
Graphic: Welsh Water
Rebecca says this was unjustified.
By 2017 the total amount given back to customers represents less than 2 per cent of the £10 billion customers have paid in bills.
In Scotland, the water industry is owned by the government which waives its dividend.
This allows prices to be lower.
Direct comparisons are impossible but, in 2017-2018, the average bill in Scotland is £357 a year.
In Wales, it’s £439.
The England and Wales average is £395.
Rebecca has published three articles on the scandal.
The Great Welsh Water Robbery, published in July 2014, traced the origins of the company from 2001.
Two senior executives — Nigel Annett and Chris Jones — seized control of the company by raising billions of pounds worth of loans in the form of bonds.
This investigation showed how they and the other directors went on to pay themselves twice as much as their Scottish counterparts — even though Scottish Water is twice the size.
The article showed that, by 2014, customers should have received at least £250 million in “customer dividends.”
WATER MILLIONAIRE
CHRIS JONES is one of the most powerful chief executives in Britain. With no shareholders to trouble him — and a weak governance system — he dominates Welsh Water. He has the wealth to prove it — he’s made millions from Welsh Water, adding £773,000 in 2016-2017.
Photo: Welsh Water
(Rebecca now estimates that the figure has risen to half a billion pounds.)
In 2015 The Great Welsh Water Conspiracy revealed that the water regulator Ofwat had effectively “fined” the company £85 million for spending too much on infrastructure between 2010 and 2015.
The company insisted this was simply a technical adjustment.
The £85 million came off customers bills in the 2015-2020 period.
The article also examined the company’s use of the Cayman Islands tax haven to raise its loans.
This raises the possibility that some of the companies lending money to Welsh Water could be avoiding UK tax.
In 2017 The Great Welsh Water Poverty Racket investigated the company’s record in dealing with poverty.
At first sight the record is impressive — by March 2017 Welsh Water was helping 66,000 low-income customers with a range of social tariffs.
This is better than any of the privatised companies in England and Wales.
But this has to be seen against the scale of the problem of low-income in Wales.
Statistics from water regulator Ofwat suggest that more than 460,000 people — nearly a third of all Welsh Water’s domestic customers — are eligible for the social tariffs.
This means that only one in seven households actually receive help.
Between 2010 and 2015 Welsh Water picked up the tab for the social tariffs.
In 2015, however, it took advantage of legislation which allows companies to charge some customers more to subsidise its social tariffs.
In the three years since then, Welsh Water has secretly added £8.45 to customers bills.
Customers have not been told they are paying this extra levy.
What is worse is that the 400,000 low income families who miss out on the social tariffs are now having to pay the secret tax as well.
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THIS INVESTIGATION started as a result of a separate probe into nepotism and patronage at BBC Wales.
Throughout its history Welsh Water has had a former head of BBC Wales on its board who enjoyed close links with the current head.
Geraint Talfan Davies was a non-executive director of Welsh Water from 2001 to 2010.
In that period, the head of BBC Wales was Menna Richards.
She was Talfan Davies’ protégé.
MENNA RICHARDS
MENNA RICHARDS, the £70,000 a year senior independent director of Welsh Water, is part of the reason why Welsh Water has escaped proper scrutiny. A former Director of BBC Wales, she continues the Welsh Water tradition of always having a former head of BBC Wales on its board …
Photo: PA
In 2010 Menna Richards was appointed a non-executive director of Welsh Water even though she was still serving as head of BBC Wales.
This raised eyebrows because the Corporation frowns on senior figures taking paid posts.
When Menna Richards joined Welsh Water, she was replaced as BBC Wales Director by Rhodri Talfan Davies.
He’s the son of Geraint Talfan Davies and was himself a protégé of Menna Richards.
This means that Welsh Water has a former head of BBC Wales on its board who is also a close family friend of the current head of BBC Wales …
For more on this see the articles in The Son Of The Man From Uncle and In The Name Of The Father?
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REBECCA 