Fines for water companies

[Thomzo]

Can anyone please tell me what the point of fining a water company is?

http://www.metro.co.uk/news/article.htm ... page_id=34

United Utilities are to be fined £8.5m for breaching something. But who is going to pay? It'll be the customer that ends up paying for this. As far as I am aware, we have no choice who we get our water from so the customer can't show their disapproval by going elsewhere.

Where does the money from the fine go? Does it actually get used to improve the water supply or does it just go into the treasury?

Is this just another form of tax on the consumer? Not only that it will divert resources that the water company should be using to repair and improve the water supply.

Please someone, tell me it doesn't work like this.

Cheers
Zoe

[Muddypause]

Actually, I'm not sure OffWat (or whatever they are called) would let the company simply raise it's prices to cover a fine. Since all the utilities are now privatised cmpanies, the shareholder's dividens will reflect the reduced profit due to the fine. In the capitalist model of the universe, this will focus the attention of the shareholders to demand better management[1].

[1] Of course 'better management' actually means 'more profits', not better managed resources.