The Observer view on the woeful state of the UK’s water industry – The Guardian

If the UK is to survive the worst impacts of climate change, it will need robust infrastructure to protect its citizens from the meteorological threats that lie ahead. By every scientific estimate, our hothouse future is going to be one of increasingly unpleasant extremes: more intense heatwaves, rising summer temperatures, more violent storms, rising sea levels – and, of course, worsening droughts. These impacts are baked into the future, scientists have repeatedly warned us. Thanks to the huge amounts of greenhouse gases we have already pumped into the atmosphere, we have no way of avoiding these changes. We can only try to cope with them.
Our response to the current severe water shortages therefore gives us a chance to assess how well we are preparing for the meteorological mayhem ahead. In short, can we gain some confidence about our ability to fight climate change from the way our water companies are attempting to battle the drought that is now afflicting the country? The answer is straightforward and depressing. If the water industry in England is anything to go by, we look woefully unfit for the coming battle.
Certainly, the images of parched grasslands and empty reservoirs that have filled our TV screens and newspapers for the past week indicate that we have learned very little about the business of maintaining a proper national water supply. No substantial reservoir has been constructed in England since the Kielder Water dam was built in 1981. Thus, our capacity to store fresh water has remained static as demand for it has risen steadily with the growth of the population.
This inability to match water storage to the needs of the population has had grim knock-on effects. First, it has forced us to pump ever more water from groundwater sources. This has stressed aquifers, lowered the water table in many areas and threatened chalk streams. This last hazard is particularly vexing because chalk streams are some of the planet’s rarest habitats – and the vast majority are in England.
Failing to collect and store water is also vexing given that the UK is becoming wetter. An early impact of climate change has meant that the period 2011-2020 was 9% wetter, in terms of rainfall, than the period 1961-1990. So there is no shortage of water we can collect. Unfortunately, it seems we just lack the urge to do so.
Then, when we do manage to obtain and store water, we waste it. England’s largest water and wastewater service provider Thames Water, which supplies drinking water to 9 million customers in London and the Thames Valley, has admitted that it is losing more than more than 600m litres of water a day. That is enough to fill 240 Olympic swimming pools and is almost a quarter of all the water it supplies. For the whole of England and Wales, the daily loss – from leaks and other losses – from all of the two nations’ main water companies is 3bn litres of water, a fifth of their total supply.
Such staggering profligacy looks inexcusable, particularly at a time when we are experiencing empty reservoirs, hosepipe bans and visions of scorched gardens, parks and playing fields. Even worse, analyses indicate that, while water bills in England have risen noticeably over the past three decades, spending on improved infrastructure by water companies has, at best, flatlined or declined, depending on how you break down the figures. Hence the intensity of our current drought, it is argued.
At the same time, huge dividends have been paid out to water company shareholders while their chief executives have been generously rewarded for their work. Sarah Bentley, head of Thames Water, has a basic salary of £750,000 and has also received hefty annual bonuses. Other CEOs of water companies have been rewarded with similar largesse, with one recent analysis indicating that chief executives of England’s water companies earned a total of £34m over the past two years. Yet these individuals do little more than act as senior civil servants, critics argue.
These company chiefs have been the main beneficiaries of the privatisation of England’s water companies, which was imposed by the Conservative government in 1989. The move was hailed by Margaret Thatcher and her ministers as one that would ensure soaring investment in the industry while bringing down consumer prices. In fact, the opposite has occurred. At the same time, a national resource has ended up in the ownership of foreign investors. Hefty chunks of Thames Water have been bought by Chinese, Abu Dhabi and Kuwait finance groups, for example.
Such investments are unlikely to have been made for charitable reasons, it should be noted. They will have been made because the dividends looked lucrative to investors. Thus, something that should be treated as a national resource and a core defence against climate change has been sold off for short-term financial gain.
This is not the way to invest in infrastructure or prepare defences against the vicissitudes of climate change. The lessons to be learned from our response to the drought run deep. We are not only ill-prepared in terms of pipelines, reservoirs and leak prevention. We are also financially and politically misplaced in our attitudes to climate crises that will assuredly worsen in coming years.
This article, including the headline, was amended on 14 August 2022 to clarify that while it was referring to the UK climate in general, the focus was on England’s water industry in particular.

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