Thames Water: UK water firm faces new investigation by Ofwat over late delivery of environmental schemes

Ofwat said the enforcement case against the company aimed to determine whether it had breached its legal obligations. The watchdog said that Thames itself had been in contact to alert it and the Environment Agency that it will be unlikely to deliver more than 100 of 812 improvements it had promised by a 31 March deadline.

The schemes fall under the Water Industry National Environmental Programme (WINEP) during the current 2020-2025 pricing period. That ends at the end of March when Thames customers then face an increase to their water bills over the next five years from April to pay for further infrastructure improvements. Thames Water's 16 million customers face a 31% hike to £639 - a rise of £151.

Lynn Parker, Ofwat's senior director for enforcement, said: "Customers have paid for Thames Water to carry out these essential environmental schemes. We take any indication that water companies are not meeting their legal obligations very seriously.

“Therefore, we have launched an investigation to understand whether the delayed delivery of environmental schemes means that Thames Water has breached its obligations. If we find reason to act, we will use our full range of powers to hold Thames to account for any failures and will require them to put things right."

The regulator ultimately has the power to fine the relevant part of the business up to 10% of its annual turnover. Thames Water was fined £18m in December for breaking shareholder payout rules. It was also slapped with a £104m bill last summer for sewage failings.

It comes as Thames Water is currently fighting to secure its financial future amid a £19bn debt pile. It has previously warned it will run out of money next month, raising the prospect of the utility entering a special administration regime, unless new financing and new equity is secured.