With more than 30 million people in England and Wales facing a hosepipe ban, and thunderstorms expected but no meaningful rainfall likely for many weeks, it’s worth asking what we have learned so far in the great drought of 2022.
Here’s a bit of a list, by no means complete.
Water companies leak more than 3bn litres a day. That is enough to supply almost 22 million people with their daily water needs of around 142 litres. In some areas, companies are leaking nearly a quarter of all the water they are expensively treating. Thames Water is the largest and the worst company of all, losing more than 635m litres of water a day. All companies regularly pledge to reduce leaks – as they have for many years – but many expect to make cuts of only 50% in the next 20 years. Ofwat figures show that leakage rates have more or less remained the same for 20 years. So much for 20 years of promises.
England and Wales are the only countries in the world to have fully privatised their water supplies. Following intense international grassroots opposition from the 1990s onwards, all other countries retained some state control over pricing, investment and quality. The evidence suggests that privatisation in England and Wales has led to higher bills, little or no reduction in pollution or waste, and no greater water security. That’s called progress.
Climate change is a growing part of the problem, but so, too, are underinvestment, greed, mismanagement and failed regulation. According to Andrew Sells, the chairman of Natural England from 2014 to 2019, Ofwat has allowed the water companies over the past 20 years to borrow at unsustainable levels, while paying out excessive dividends to shareholders rather than investing in capital equipment. Meanwhile, the Environment Agency has had its budgets slashed to the point that it is unable to prevent pollution. Follow the money, as they say.
English and Welsh water companies have handed their shareholders billions of pounds since privatisation, including more than £57bn in dividends from English firms alone in the past 30 years. By contrast, Scottish Water – which is publicly owned – has invested nearly 35% more per household in infrastructure, and Welsh Water became a not-for-profit company in 2001. Research by the Liberal Democrats suggests water company executives in England were awarded £27m in bonuses over the past two years, despite pumping out raw sewage into waterways 1,000 times a day. Southern Water, which has brought in a hosepipe ban, paid its bosses £3.4m in bonuses last year.
Water for households costs more in England and Wales than in most regularly drought-ravaged countries in Europe. Despite having some of the heaviest and most reliable rainfall of any industrialised country, British water companies charge more than those in Spain, Germany, Italy and Greece. In this regard, we truly are out in front.
The population of Britain has grown by around 10 million since water privatisation, but no major reservoir has been built in England in that time, and only about 4% of UK water is regularly transferred between traditionally wet areas in the north and west and dry areas in the south and east. Levelling up has yet to happen.
Water companies say they face widespread opposition in building new reservoirs, but Thames Water, Severn Trent and Southern Water, among others, have all sold off some of their reservoirs in recent years to save money, or used them to build houses. Only one new reservoir near Portsmouth currently has planning permission.
Britain has some of the most polluted water in Europe thanks to lax regulation of the companies. It has become routine for some to dump sewage into rivers to save money and there were more than 400,000 water pollution incidents in 2020. According to the Wildlife Trusts, rising pollution levels place 10% of freshwater and wetland species at risk of extinction.
Despite plans to build hundreds of thousands of new homes every year, many in drought-prone areas in the south and east of England, there is little or no requirement for housebuilders to automatically install water-saving devices or incentives for consumers to use less water.
The drought that now stretches across Europe, the extreme heatwaves and the cost of living crisis are all ultimately the result of our reliance on fossil fuels, which is causing extreme changes in the distribution of water. Yet the UK government continues to offer lucrative “investment incentives” to fossil fuel companies in the certain knowledge that the sorts of droughts and heatwaves that much of the northern hemisphere is now experiencing will become more frequent and intense.
So we have learned a lot, some of it a reminder of things we already knew, but what is also clear is that if we don’t join the dots and demand better than this, nothing will change. We also know the next drought is coming. See you there.
• This article was amended on 15 August 2022 to clarify that the £57bn dividend figure applies to English water companies alone, and that Welsh Water became a not-for-profit company in 2001.
John Vidal is a former Guardian environment editor