Water regulators taken to task in damning report by MPs

England faces a serious risk of running out of water within 20 years because the three regulators failed to show leadership and took their “eye off the ball”, a cross-party committees of MPs has said.

In a damning report, the public accounts committee said the Department for Food, Environment and Rural Affairs, the financial regulator Ofwat and the Environment Agency had failed to be clear with the privatised water monopolies over how they should balance investment in infrastructure with reducing customers’ bills. 

As a result, more than 3bn litres, or a fifth of treated water, is lost to leakage every day: a situation the committee described as “wholly unacceptable”.

“Ponderous” water companies have made “no progress” in reducing leakage over the past 20 years, the MPs said.

Although Ofwat has set new targets for water companies to reduce leakage by 16 per cent between 2020 and 2025, the MPs said meeting the targets would rely on “unknown and untested” approaches.

Meg Hillier MP, chair of the committee, said: “It is very hard to imagine, in this country, turning the tap and not having enough clean, drinkable water come out — but that is exactly what we now face.

“Empty words on climate commitments and unfunded public information campaigns will get us where we’ve got the past 20 years: nowhere. Defra has failed to lead and water companies have failed to act: we look now to the department to step up, make up for lost time and see we get action before it’s too late.”

The call for tighter regulation comes amid a growing outcry over the performance of England’s privatised water companies, which have been accused of extracting excessive pay and dividends at the same time as presiding over a series of pollution and leakage failures.

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A burst water main in London’s Bloomsbury. More than 3bn litres, or a fifth of treated water, is lost to leakage every day © Robert Stainforth/Alamy

This week a 24-inch diameter water pipe flooded a main road in north London, trapping eight drivers who had to be rescued by firefighters. Thames Water, the water company responsible, said it was “working closely with Transport for London, to get things back to normal as soon as possible”.

The MPs said Thames Water was the worst for leakage and that it lost 22,000 litres per km of pipe each day between 2017-18 and 2019-20, more than double the rate of the next worst performer.

The report came just a week after Thames revealed that it had awarded its former chief executive a £2.8m pay-off even though he was ousted by the board last year for failing to improve performance on leakage. Thames says it has improved leakage by 15 per cent in the past year.

The MPs also accused the government of failing to develop a national message to consumers on the need to reduce water consumption. Personal consumption now stands at 143 litres a day — an increase of 3 per cent on 2014-15 and significantly higher than in Germany, at 121 litres (2016-17), and the average of 128 litres for EU member states in 2017.

In July 2019 organisations including the Environment Agency launched the “Love Water” campaign, but it has no central funding and relies on voluntary contributions from water companies, none of which have been made.

The agency said: “We know that if we don’t take action now many areas of England will face water shortages by 2050, which is why we are always striving to ensure water supplies are sustainable.”

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Ofwat said it would “carefully consider” the committee’s recommendations. “We have taken strong action to improve long-term planning and have set out a £51bn programme over the next five years to make major reductions to leakage, cut pollution by a third, and back new infrastructure,” the regulator said.

Water UK, which represents water companies, said the industry was “making significant progress, with leakage down 7 per cent this year to the lowest level since records began”.

Defra said: “We absolutely recognise the need to safeguard our water supplies for future generations, which is why our National Framework for Water Resources sets out a bold vision for bringing together consumers, businesses and industry to sustainably protect our water supplies.”



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