Water bills: Where does my money go?
As a mission, it sounded easy - to find out where the money from my humble water bill goes.
It turned out to be an eye-opening tale of global finance and deeply contentious figures.
My company is Thames Water, the UK's largest water and sewerage provider, with 14 million customers.
First I got on a train to Milton Keynes, home of the Open University, to meet Michael Pryke, from its social sciences faculty, who has studied the finances of Thames Water.
He explained that after privatisation in 1989, English and Welsh water companies were floated on the stock exchange and, as public companies, were expected to be accountable and transparent.
Since then, some have been bought by private groups of international investors seeking high returns.'Human revenue stream'
Mr Pryke showed me a diagram of Thames Water's "wedding-cake" corporate structure. There were eight levels, including the water provider that sends me my bill.
One of the eight companies is registered in the Cayman Islands. The owners are the Kemble Water consortium, led by an arm of the Australian investment bank Macquarie, which manages a range of investors, including Chinese and Abu Dhabi sovereign wealth funds.
He explained how Thames Water raised money for investment, issuing bonds or securities. These are sold to investors who get their money back with interest, at some future date. The big surprise was these investors were not investing in pipes and sewers, but in customers' ability to pay their bills far into the future.
As Mr Pryke put it, "they're turning you into a walking, talking financial asset - a human revenue stream". Some of these bonds run until 2062, when I will be long gone.
- Serves London, Berkshire, Buckinghamshire, Gloucestershire, Kent, Oxfordshire, Surrey and Wiltshire
- Is privately owned and has 14 million customers
- Average customer bill for 2013-14 is £354
- Recent figures show a 19% surge in pre-tax profits to £134m from April to the end of September 2013
- Delayed paying corporation tax due to investments in its infrastructure amounting to £1bn a year between 2010 and 2015
He also explained that the process of securitisation involves various financial companies who earn fees at each stage.
He recited a list: "You've got financial advisors, you've got legal specialists, you've got credit facility providers, you've got finance lessors, you've got hedge counterparties, all of them paid out of household bills."
Next stop was Parliament, where I met Conservative MP Charlie Elphicke, a former tax lawyer, who showed me an unpublished report he has prepared on the water industry.
He was concerned about levels of dividends paid to shareholders. He said for the past three years, Thames Water had paid out more in dividends than it actually made in profits, borrowing to make up the shortfall.
He described this as "taking out the cash reserves they have, paying that out to shareholders and going down the bank to borrow more money".
By now I really wanted to talk to Thames Water. They wouldn't do an interview but told me Mr Elphicke was incorrect - though they did not produce specific figures for the past three years. Instead they quoted an average over eight years, saying the company "has paid out 82% of post-tax profits as dividends since 2006".
The structure of some water companies is largely composed of debt - the kind generated by securitisation.'Focus on cash'
In his report Mr Elphicke looked at the "gearing" of Thames Water, that is, its ratio of debt compared to the capital in the business. His figures suggested 93% of the business was debt.
Again Thames Water said Mr Elphicke was wrong - because he had used an inappropriate measure of its debt (total creditors rather than net debt) and said the real figure was 76%. That was still pretty stunning to me.
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- Listen to File on 4 on BBC Radio 4 at 20:00 GMT on Tuesday 14 January. Or catch it later on the BBC iPlayer.
Several other water companies have similar structures to Thames and similar levels of debt. Does it matter if a company is so "highly geared"?
Robert Miller-Bakewell, a leading water analyst, told me "there's no doubt" such companies are managed in a different manner.
"The whole focus is on cash and that may move attention away from issues like customer service and capital investment," he added.
End Quote Sir Ian Byatt Former water regulator
I think there are an awful lot of clever wheezes going on in the water sector at the moment ”
And then there's corporation tax. I learned that companies can defer paying it if they make big investments, but also if they're paying interest on debts. According to Mr Elphicke, my water company has paid no corporation tax for three years.
Thames Water does not dispute this. Indeed it has said it may not pay any, for up to a decade, because of the scale of its investments.
Most water companies have asked the regulator for lower price rises for the next five years, at or less than the rate of inflation. However, Thames Water wants to raise bills by 11% to help pay for a super-sewer to address sewage pollution in the Thames.
Some argue if the company had spent less on dividends it would have money in the bank to spend on the new tunnel.
Former water regulator Sir Ian Byatt, who oversaw the industry from privatisation until 2000, is opposed to the building of the Tideway Tunnel - he thinks there are cheaper options - but he too is outspoken in his view of Thames and its dividends policy.
"I'm very worried about the scale of dividends," he said.
"I believe that Thames in the last six years have paid out extremely large dividends and those dividends, I believe, should have been available for future investment, but because they've disappeared and because the structure is opaque and the authorities opaque - how do you get them back again?
"I think there are an awful lot of clever wheezes going on in the water sector at the moment and I'd like to see it much simpler and much more transparent and the companies required to explain where the money is going because I am also a bill-payer and I like to know where the money is going."
It has not been a reassuring journey for me. It has raised serious questions about transparency and fairness in our water industry. But next time I click the mouse to pay my water bill, I will have a better idea where the money is going.
File on 4 was broadcast on BBC Radio 4 at 20:00 GMT on Tuesday, 14 January. Catch it on the BBC iPlayer.