Drought looms and private companies are failing us – water should be in public hands

While paying billions of pounds in dividends to their shareholders, water companies are wasting billions of litres of water every day

We are facing unprecedented weather as a result of the climate crisis. Droughts and extreme heat unlike anything we’ve seen before are putting an enormous strain both on people’s health and the functioning of our services more generally.

The worrying news is that, with at least 1.5C temperature rise already baked in, these extreme weather events are only going to increase in frequency and intensity as we move through the climate crisis.

As in so many areas, the government is asleep at the wheel. As the country bakes, crops shrivel in the fields, and reservoirs dry up, we have no action, just a weak message from the environment secretary to water companies, as if they had handed in sub-standard homework rather than presided over waste of water on a grand scale.

The positive news, if you can view it that way, is the government has taken so little action so far that there is at least plenty of scope for them to do better. As Greens we have a long list of actions that the government could be taking immediately to help mitigate the worst impacts of the climate crisis.

With droughts expected to be declared in parts of the UK by tomorrow, and many households already facing restrictions on the water usage, it could come as a shock to many to learn that up to three billion litres of water are wasted each day. When water was first privatised, the story was that this would result in record investment. But the country still struggles with Victorian infrastructure and the money promised for investment has been paid out in dividends instead.

While monopoly water companies are paying out to shareholders, they lose between a quarter and a fifth of the water in their mains through unrepaired leaks while sewage regularly flows into rivers and coastlines.

This is a national scandal and the water industry cannot continue to be rewarded for its failure. It’s worth remembering the staggering negligence these figures suggest, the next time you hear a Conservative or Labour politician trying to tell you that the market will provide the best service.

The £57bn paid out in dividends over the last 30 years and the inflated salaries of water bosses should have gone into plugging the leaks and providing a service which is already prepared for the changing climate. These record high temperatures and droughts may be unprecedented – but they are not unpredicted. We have known for years that we could expect hotter, drier summers as well as stronger storms and more frequent flooding as a consequence of a heating atmosphere.

If we are going to end leaks, and stop sewage from going into watercourses and ending up on our coastline, we need to take the water supply back into public ownership, run for the benefit of the public, rather than shareholders.

Our demand that the water companies are brought back into public ownership is not ideological but practical. Chasing profits is simply incompatible with providing a good public service. For something so essential as water – and a service for which your local water company is a monopoly supplier – there has never been any justification for private sector involvement.

It’s clear that the privatisation of this fundamental resource has failed miserably. It’s also completely at odds with what happens pretty much everywhere else. The vast majority of people around the world do not have to line the pockets of the rich in order to gain access to this resource – it is seen as a human right.

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Back in 2018, GMB union found that “at least 71 per cent of shares in England’s nine privatised water companies are owned by organisations from overseas including the super-rich, banks, hedge funds, foreign governments and businesses based in tax havens.” So while citizens of other countries enjoy water as a public service, we are ripped off by private companies whose profits are offshored.

The declaration of a drought tomorrow is a clear indication that the situation with our water supply is now critical. That is why we have called this week for the regulator to step in – for Ofwat to start applying enforcement orders immediately on companies if they are not properly carrying out their statutory functions. This would underline their legal duty to ensure that water actually reaches people’s homes in sufficient quantity and of adequate standard, and to end the scandal of sewage discharges into our rivers. It is a necessary step that is needed to address the immediate crisis.

But while that might tackle the worst of the water leaks, it does nothing to stop the huge leaks of money going to shareholders and water company bosses, repeatedly rewarded for failure. For that, we need to return our water companies to public ownership, a cut to dividends, and legislation that would ensure water bosses earn no more than ten times the salary of the lowest paid in their companies.

Carla Denyer is co-leader of the Green Party