England’s Water Crisis, Part 1

England is running out of water and with it the illusion that privatised utility systems can serve the public good. What began in 1989 as an experiment in market-led efficiency has deteriorated into a escalating crisis marked by leaking pipes, polluted rivers, and companies teetering on financial ruin. As climate issues continue and infrastructure crumbles, England’s water sector is approaching a breaking point both ecologically and politically.

A System in Decline

Leaking Pipes and Pollution

The warning signs are becoming clearer: water quality is deteriorating, and vast quantities of water are being lost daily. In 2023 alone, untreated sewage was dumped into England’s rivers and coastal waters for an astonishing 3.6 million hours. Meanwhile, nearly 3 billion litres of clean water leak from aging pipes every single day.

Insufficiency of Government Response

The government has responded, belatedly, by approving the construction of two new reservoirs in Lincolnshire and East Anglia—the first major water storage projects since 1992. But the scale of the challenge dwarfs these efforts. By 2050, the Environment Agency projects a daily shortfall of 5 billion litres of water. Without decisive action, large parts of England face an era of increasing scarcity.

Is Privatisation a Root Cause?

There is a deeper story beyond environmental change: economic ideology. In 1989, Margaret Thatcher’s Conservative government privatised England’s ten regional water authorities, promising efficiency, innovation, and investment. The reality was stark:

• £5 billion in debt was written off
• £1.5 billion handed out in public subsidies
• Companies sold for just £7.6 billion

Since then, the newly privatised water firms have paid out more than £75 billion in dividends to shareholders. Critics argue this money could have been reinvested into infrastructure, sustainability, or service improvement. Instead, water bills have soared by over 350% in real terms, while the system itself has decayed.

Executive Pay at Major UK Water Companies

Thames Water

• CEO: Chris Weston (appointed January 2024)
• Base Salary: £850,000
• Bonus Potential: Up to 156% of salary (~£1.3 million)
• Total Potential Package: Approximately £2.3 million
• Recent Bonus: £195,000 for three months’ work in early 2024

Severn Trent

• CEO: Liv Garfield
• 2023–24 Total Pay: £3.2 million, including a £584,000 bonus
• Note: Despite a 33% increase in sewage spills, Garfield’s compensation rose

Yorkshire Water

• CEO: Nicola Shaw
• 2023–24 Total Pay: £657,000 in salary and benefits, plus a £371,000 bonus
• Note: The bonus was awarded despite the company facing criticism for service failures

Pennon Group (South West Water)

• CEO: Susan Davy
• 2023–24 Total Pay: £562,000 in fixed pay, plus £298,000 from a long-term incentive plan
• Note: Davy declined her annual bonus amid public backlash over water quality issues

Anglian Water

• CEO: Peter Simpson
• 2022 Pay: £1.3 million, including a £337,651 bonus
• Note: The bonus was awarded despite the company’s poor pollution record

Northumbrian Water

• CEO: Heidi Mottram
• 2023–24 Total Pay: £842,000, including a £234,000 bonus
• Note: This represents an 8.8% increase from the previous year

South East Water

• CEO: David Hinton
• 2021–22 Base Salary: £271,620
• Note: Additional compensation details for this period are not publicly disclosed

Industry-Wide Trends

• Total Executive Bonuses (2023–24): £9.1 million across English and Welsh water companies
• Total Executive Compensation: Over £20 million, including base pay and pension contributions

Case Study: Thames Water

Thames Water, supplying millions across London and the southeast, is now £18 billion in debt, with more than half linked to inflation—worsening its financial vulnerability in a high-interest environment. Rather than upgrading its network, reports suggest Thames Water used complex financial structures to inflate asset values, avoid taxes, and conceal dividend payouts. The company has been fined approximately £180 million since 2010 for environmental breaches, yet continues to pollute.

Partly owned by foreign sovereign wealth funds, Thames Water now faces possible collapse unless regulators approve higher consumer bills and guaranteed investor returns. The public is effectively held hostage: pay more or watch the taps run dry?

An Industry in Crisis

• High debt and low investment
• Foreign ownership with limited accountability
• Profit-driven models prioritising shareholder returns over public need

Water companies operate as regional monopolies across England, meaning customers cannot switch providers if dissatisfied. This lack of competition has enabled systematic financial extraction while essential services suffer. Regulatory bodies like Ofwat and the Environment Agency have proven largely ineffective: fines and public rebukes do little to deter bad behaviour, and enforcement powers remain weak compared to the entrenched power of multinational shareholders.

The Human and Environmental Cost

• Public health is at risk from contaminated rivers and beaches.
• Communities endure rising bills and unreliable services.
• Water workers face outsourcing, job insecurity, and stagnant wages.
• The environment suffers from over‐extraction, pollution, and habitat loss.

The situation is particularly dire for working-class and rural communities, where infrastructure is often older and neglected, and resilience against climate impacts is lowest.

Political Paralysis

Despite the mounting crisis, political will for structural reform remains elusive. While public opinion increasingly favours nationalisation, successive governments—both Conservative and Labour—have shied away from reversing privatisation. Labour, once committed to public ownership of utilities, recently dropped its pledge to re-nationalise water, citing cost and feasibility concerns.

Reclaiming Public Ownership

Calls for public ownership are growing louder for good reason. Water is a natural and essential resource that should not be treated as a commodity for private profit. Advocates argue a publicly owned water system would:

• Reinvest profits into infrastructure and climate resilience
• Ensure democratic accountability and local control
• Improve environmental performance and transparency
• Support fair wages and working conditions

Public ownership does not mean bureaucratic stagnation—it means treating water as a common good, managed for long-term sustainability. Countries like Scotland, where water remains in public hands, offer models for effective governance, investment, and environmental stewardship.

A Troubled History: England’s Water Supply and Welsh Reservoirs

Long before privatisation, the politics of water in England have been fraught—especially with Wales. As early as the 19th century, England looked westward for reliable water to support its industrial cities. Wales’s abundant rainfall and terrain made it ideal.

One contentious episode came in the 1960s with the creation of the Tryweryn Reservoir in north Wales. Built to supply Liverpool, the project submerged the Welsh village of Capel Celyn despite local opposition. It became a symbol of alleged English exploitation of Welsh resources, deepening nationalist sentiment.

Today, cross-border pipelines still transfer water from reservoirs such as Lake Vyrnwy and the Elan Valley to English cities. While legal agreements govern these transfers, critics argue the system disproportionately benefits England. In the context of environmental stress and growing scarcity, these long-standing tensions risk flaring up again.

A Watershed Moment

England’s water crisis is more than a policy failure—it's a symptom of a deeper ideological collapse. For over three decades, privatisation delivered wealth to investors and hardship to the public. Now, with environmental pressures rising and infrastructure aging, England faces a stark choice: double down on deregulated decay or reclaim water as a public entity.

“Rebuilding public trust, restoring environmental health, and ensuring water security for future generations will require more than tweaks to regulation or temporary fixes. It will require structural change and a new vision—one that puts people, not profit, at the centre of essential services.”

The time to act is now. England cannot afford to let its most precious resource be bled dry by failing firms and failed ideologies.

workersofengland.co.uk | Independent Workers Trade Union