New data shows that firms have cut capital expenditure since privatisation
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It’s that time of year when many people up and down the country will be anxiously eyeing the weather forecast. Not because they’re hoping for a white Christmas but for signs of imminent rain that might lead water companies to discharge raw sewage into Britain’s rivers and seas, destroying hopes of a traditional Boxing Day swim. They are certainly right to be nervous. The water companies between them discharged untreated sewage into British waters [400,000 times](https://archive.ph/QjnlW) in 2020, often seemingly after the lightest drizzle. This is a reason why 84 per cent of rivers and lakes in England failed to meet ecological targets.
Earlier this year public outrage at the behaviour of the water companies took the government by surprise when it tried to block a House of Lords amendment to the Environment Act which would have banned sewage discharges, forcing [a partial U-turn](https://archive.ph/LMCWT). Now it emerges that the ten largest water companies cut capital expenditure in waste water systems by up to a fifth in the 30 years after privatisation. Data obtained by the Windrush Against Sewage Pollution campaign group via freedom of information requests shows that annual investment over the past six years was 19 per cent lower than it was in the 1990s, at £2.98 billion compared with £2.4 billion.
The new data merely confirms what many suspected already. The privatised water companies inherited an ageing sewerage system, including large sections built by the Victorians. But while they have increased spending on upgrades and maintenance, they have failed to invest in new infrastructure and capacity needed to support an expanding population. Instead they have relied on a provision in the regulations that allowed them to discharge raw sewage in an emergency to make such gross emissions a common occurrence. In this they were abetted by a weak regulator in the Environment Agency that at least until recently appeared only too willing to turn a blind eye to their cynical activities.
What makes the actions of the water companies particularly galling is that during these decades of underinvestment shareholders succeeded in extracting £72 billion in dividends from the industry while customer bills have risen by 31 per cent in real terms since the 1990s. The most egregious example of corporate greed was Thames Water, whose owner, the Australian private equity group [Macquarie](https://archive.ph/tqZ7z), extracted more than £3 billion in dividends over a decade, only to declare the business was too indebted to pay for the much-needed London supersewer. That vital piece of infrastructure is now being built by a consortium, funded in part by a precept on customer bills.
This latest data will rightly fuel debate as to whether enough is being done to oblige water companies to meet their responsibility to provide a sewage system that meets the needs of modern Britain. In its attempt to head off the parliamentary rebellion over the Environment Act, the government agreed to a new amendment that requires the water companies to reduce the adverse effects of sewage outflows, but crucially did not give a specific deadline. That is not good enough. The public has been let down by an industry regulator, Ofwat, that has prioritised keeping bills low, and an environmental regulator unwilling to use its considerable powers to punish water companies for pollution. A new approach is needed to create a system in which everyone, Boxing Day swimmers included, can have confidence.
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New data shows that firms have cut capital expenditure since privatisation
–
It’s that time of year when many people up and down the country will be anxiously eyeing the weather forecast. Not because they’re hoping for a white Christmas but for signs of imminent rain that might lead water companies to discharge raw sewage into Britain’s rivers and seas, destroying hopes of a traditional Boxing Day swim. They are certainly right to be nervous. The water companies between them discharged untreated sewage into British waters [400,000 times](https://archive.ph/QjnlW) in 2020, often seemingly after the lightest drizzle. This is a reason why 84 per cent of rivers and lakes in England failed to meet ecological targets.
Earlier this year public outrage at the behaviour of the water companies took the government by surprise when it tried to block a House of Lords amendment to the Environment Act which would have banned sewage discharges, forcing [a partial U-turn](https://archive.ph/LMCWT). Now it emerges that the ten largest water companies cut capital expenditure in waste water systems by up to a fifth in the 30 years after privatisation. Data obtained by the Windrush Against Sewage Pollution campaign group via freedom of information requests shows that annual investment over the past six years was 19 per cent lower than it was in the 1990s, at £2.98 billion compared with £2.4 billion.
The new data merely confirms what many suspected already. The privatised water companies inherited an ageing sewerage system, including large sections built by the Victorians. But while they have increased spending on upgrades and maintenance, they have failed to invest in new infrastructure and capacity needed to support an expanding population. Instead they have relied on a provision in the regulations that allowed them to discharge raw sewage in an emergency to make such gross emissions a common occurrence. In this they were abetted by a weak regulator in the Environment Agency that at least until recently appeared only too willing to turn a blind eye to their cynical activities.
What makes the actions of the water companies particularly galling is that during these decades of underinvestment shareholders succeeded in extracting £72 billion in dividends from the industry while customer bills have risen by 31 per cent in real terms since the 1990s. The most egregious example of corporate greed was Thames Water, whose owner, the Australian private equity group [Macquarie](https://archive.ph/tqZ7z), extracted more than £3 billion in dividends over a decade, only to declare the business was too indebted to pay for the much-needed London supersewer. That vital piece of infrastructure is now being built by a consortium, funded in part by a precept on customer bills.
This latest data will rightly fuel debate as to whether enough is being done to oblige water companies to meet their responsibility to provide a sewage system that meets the needs of modern Britain. In its attempt to head off the parliamentary rebellion over the Environment Act, the government agreed to a new amendment that requires the water companies to reduce the adverse effects of sewage outflows, but crucially did not give a specific deadline. That is not good enough. The public has been let down by an industry regulator, Ofwat, that has prioritised keeping bills low, and an environmental regulator unwilling to use its considerable powers to punish water companies for pollution. A new approach is needed to create a system in which everyone, Boxing Day swimmers included, can have confidence.
*The Times* Thursday December 23 2021, 5.00pm GMT
More:
>FT: [England’s water groups drained sewage network of investment in recent decades](https://www.ft.com/content/86ac79f2-1169-4c2e-b28c-b18ff74aac10)
>
>Spending on crucial infrastructure such as new pipes has fallen by up to a fifth since 1990s
>
>([mirror](https://archive.ph/ScX5y))
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>Times: [Water firms accused of dumping sewage to avoid vital investment](https://www.thetimes.co.uk/article/water-firms-accused-of-dumping-sewage-to-avoid-vital-investment-8zl2flqd9)
>
>Water companies have collectively cut investment in wastewater and sewage networks by almost a fifth in the 30 years since they were privatised, according to analysis of official data.
>
>([mirror](https://archive.ph/t8H4I))
Hands up who is still stupid enough to think privatisation is a good thing?