
In 1997, when I bought the property in France that I made my holiday home for 24 years, it was too remote to have a supply of mains water. When I asked André, my French builder, if that was a major red flag he replied “Don’t worry there’s water everywhere - we just have to find a plentiful source and pump it into the house.” He also assured me that waste and sewage would be dealt with via a septic tank and soakaway which would need to be emptied only very occasionally as I would not be resident all year round.
And so it turned out ninety-nine per cent of the time. Water flowed to the house and pool via a network of underground pipes, pumps and tanks, occasionally drying up for a few hours during the hottest of summer droughts.
And, after my initial infrastructure costs, the water was entirely free because it fell from the skies or arrived into my source underground, via snow-melt from the mountains. As does all water everywhere, the provision of which to the vast majority of homes is a vital public service and a basic human right, given that a human body can only live for about three days without drinking water. So, how have we arrived at a situation in England where one of the privatised water companies is threatening to increase domestic bills by up to 73%, and in which the same companies are pumping untreated sewage every single day into our streams, rivers, lakes and around our coasts, risking our health, killing delicate ecosystems, and causing appalling levels of environmental pollution?
I thought I’d try to make sense of it all and what I have discovered is truly shocking. It is a story of corporate greed and compromised regulation in which the water companies are allowed to mark their own homework, and in which it is cheaper for them to pay any fines levied in the courts for mis-management or poor environmental practice than to fix the problems which are caused by both.
The story starts in England in 1989 when the government decided that privatising the water industry would lead to greater efficiency, better management and more investment in infrastructure. There are almost no other places in the world in which water is privatised in this way - including Scotland and Northern Ireland. At the time of privatisation, this basic necessity and public utility (and monopoly) had absolutely no debt, but was clearly in need of investment given three things: the age of the water and sewerage systems, projected population growth and potential problems arising from climate change. So what could possibly go wrong?
Who Owns Our Water?
Before I answer that question I want to tell you why debt in Thames Water, the biggest of the nine water companies, has gone up from £3.4bn in 2006 to £18.3bn in 2016. It ought to be because the company has used the profits generated by the business and additional borrowings in order to pour billions into large infrastructure projects to upgrade the outdated and inefficient water and sewerage systems. In fact, that money was paid as returns on investments owned by Macquerie, an Australian investment firm which turned Thames Water into “ a playground for its particular brand of financial engineering” (Financial Times).
Overall debt in the whole water sector in England now stands at £60bn and in 2018 Michael Gove, then Secretary of State for the Environment, admitted that England’s nine water companies had paid out 95% of their profits (£78bn) to shareholders between 2007-2016. Currently Thames Water is owned by (amongst others) sovereign wealth funds in China and Abu Dhabi. Together they hold over $2trn in assets under management, so the risk of failure of Thames Water is easily tolerated which is not true for the 16 million people (of which I am one) who rely on it for clean water. That’s just one aspect of this scandal.
Sewage - The Dirty Secret
The second scandalous aspect is sewage. Waste water is whatever we flush away via toilets, sinks, washing machines and dishwashers. It contains a variety of unpleasant detritus including human faeces, detergents, bleach, food waste, drugs, microplastics, wet wipes and condoms. We expect it to be safely taken away, treated and only then allowed to be pumped harmlessly into our waterways, including out to sea.
In fact in 2023, untreated raw sewage was pumped for 3.6m hours into those waterways, a 100% increase over 2022. This led to the Oxford boat race team captain complaining that he and several of the team had fallen ill with an E.coli infection before they lost to Cambridge in the famous annual boat race on the Thames in 2024.
By law the water companies are required to treat a minimum amount of sewage as stipulated in their environmental permits. However, they are allowed to divert raw sewage away from treatment plants at times of heavy rain. These storm overflows relieve pressure on the system and prevent the waste water from backing up and causing our toilets to overflow, something for which we should all be very grateful. However, there is evidence from whistleblowers in the industry of widespread malpractice.
Firstly, the water companies often fail to meet these minimum requirements and fail to report the fact to the environmental regulator, and secondly, the amount of sewage actually reaching the treatment works is subject to ‘flow trimming’ which can be done a number of different ways - i.e. by turning down the pumps at the pumping stations so that much less raw sewage reaches the treatment plant and is thereby diverted straight into our streams, rivers and coastal waters. In this way, water companies have saved themselves millions of pounds by not updating and upgrading sewerage works to increase their capacity in line with population growth and changing weather patterns.
A Total Failure of Regulation - Ofwat and the Environment Agency
In 2021, Southern Water was fined £90m after pleading guilty to knowingly permitting noxious matter to enter rivers and coastal waters off Kent, Surrey and Sussex for 6 years. The judge said that Southern Water had shown “a wholesale disregard for the environment, delicate ecosystem and human health”.
Despite widespread outrage, water companies are still allowed to self-report on pollution ‘incidents’, but routinely fail to do so. The amount of time that untreated sewage is spilled is not measured by the environment agency but by the water companies themselves. The scale of the horror has been exposed by musician and campaigner Feargal Sharkey, by The Rivers Trust, Surfers Against Sewage and by many independent scientists who take samples from smaller brooks, streams and rivers in their locality to show the ways in which complex ecosystems have been reduced to a stagnant grey-brown sludge.
In 2020 the Chief Executive of Ofwat (the water regulator) David Black dismissed critics and claimed that investment had quadrupled since privatisation. In fact, analysis suggests that investment in critical infrastructure has been cut by a fifth since the 1990s. Population growth and changing weather patterns have been predictable since privatisation in 1989, but not a single reservoir has been built in England in the past thirty years.
This week the regulator Ofwat appeared to get tough when they refused the water companies permission to raise household bills by the exorbitant amounts that the industry were demanding. Instead they stipulated that rises should be no more than £19 per customer each year until 2030.Thames Water is insisting that it is on the edge of bankruptcy and is claiming that it cannot attract the inward investment it needs to keep going without the guarantee of very significant price rises. Whatever happens it looks as though we, the public, will pick up the tab either through higher bills or possibly via re-nationalisation which would cost around £12bn of taxpayers money.
Recent polling suggests that 69% of people now think nationalisation is the way forward, but the new Labour government is reluctant to commit to this because their fiscal rules mean that a portion of essential services should be kept off the public balance sheet.
Instead they are proposing:
1- The end of OSM or Operator Self Monitoring for the water companies, so they can no longer cheat the system by gross under-reporting of polluting events.
2- A block on executive bonuses - Thames Water alone has paid out £3.7m bonuses, benefits and incentives to company executives over the past 3 years.
3- To introduce criminal liability for water companies for environmental failures.
4- A total overhaul of both Ofwat and the Environment Agency, especially the latter which is seen as incompetent and ineffective and was recently described as “ completely lacking in professional curiosity.”
And just today I have read that Macquerie (yes, the very same company that used Thames Water as its very own ‘playground of financial engineering’ and which, unbelievably, now owns Southern Water), has just paid a bonus of £183,000 to Southern Water’s boss whilst demanding a 73% rise in bills for its 4.2m customers over the next 6 years.
Before I started to research this subject I had no real idea of the scale of the scandal that I would discover. I knew something about the massive debts and the pumping of raw sewage, but as I read more, the angrier I became. This is the story of the rape and pillage of a public utility and a monopoly for the benefit of a handful of people who have lined their pockets at the expense of our environment, our ecosystems and our health. I believe that knowledge is power, but not in this case, because water is a monopoly and I have no choice but to pay my water bill, however much I despise the governance of Thames Water.
I’d very much like Feargal Sharkey to be appointed to head up Ofwat or the Environment Agency so that he could kick up a similar massive stink to the one caused by all that sewage.
In the meantime I will hope against hope that the water which flows from my tap is not going to poison me any time soon.
Tricia x
Watch Our Latest Video...
5 Top Eye Makeup Products For Older Women
Julie shares her top 5 eye makeup products for older women! Follow along to discover your makeup essentials...