Today in the water industry, too much money is being paid out in dividends and not enough investment is being used to fix leaks, reduce usage or mitigate climate change. We need better resilience as well as better value for money. Carbon, value for money and climate change need to be prioritised like never before.
We may think of England as notoriously wet, but we are in the lower quartile globally of available water resource per capita. In 2007, most of the South East was designated by the Environmental Agency as in serious water stress. But more people are living in areas of water stress – there will be 4.1 million more people in the South East region by 2040 and 10 million more by 2080.
Climate change is changing the predictability and flows of water into the system. If we don’t act the impact could be catastrophic.
The WWF states in England and Wales, only one in five rivers are deemed to be in good ecological health and there is a one in four chance England will experience a level four drought before 2050 – meaning standpipes in the street. We’re also facing risks of flooding with up to 2.5 million homes at risk by 2050. The fourth richest economy in the world should be leading the way on climate change resilience but right now we are sitting ducks.
These are long-term problems that need long-term solutions. To make sure our water provision is resilient we need an extra 4 billion of litres everyday by 2050. New infrastructure needs to be built sustainably and we need to plan for more water at certain times of the year and less at others.
Under the Tories, tackling climate change has become more difficult. Cuts to local authorities mean their planning budgets have almost halved since 2010 and a third of planning policy staff have been lost. Only 42 per cent of local authorities have a climate change strategy or adaptation plan.
Neither does it help that our utilities are being run for private profit. England is the only country in the world to have fully privatised its water and sewerage systems. In the 30 years since the 1989 Water Act, we are concerned too much has been paid in dividends to shareholders while household bills have increased – hitting lower income households.
The lack of accountability in the water industry means time and time again worst practice is rewarded. In 2016-17, six companies missed their leakage targets with Thames Water’s data showing 677 million litres are being lost to leakages every single day – more than Cape Town uses daily.
This isn’t just money down the drain it’s carbon spent on purification, transport and distribution wasted when we can ill afford wasteful carbon practices.
Despite this poor track record executive pay has skyrocketed with England’s top nine water and sewerage companies earning a combined £23 million in 2017. The highest paid exec took home £2.45 million – 16 times the prime minister’s salary. Six companies even have offshore finance structures in the Cayman Islands.
Instead of lining their own pockets, water companies need to be investing their profits to provide a resilient service. We have had plenty of soundbites from both the secretary of state and Ofwat, but where is the action?
A study by the University of Greenwich found consumers in England are paying £2.3 billion more a year for their water and sewerage bills today than if the utility companies had remained in public ownership. That is one reason why Labour has published plans outlining that the next Labour Government will take the water companies into public ownership.
Labour’s shadow environment team are now looking at what should accompany this proposal to tackle climate change, flooding, water scarcity, water usage, plastic pollution and micro-plastic contamination, lead pipes and water affordability to fix the water crisis. Some companies are already driving towards this but we need a more consistent and ambitious approach.
Our water industry needs to be publicly owned to be run for the public good. Pumping water around the network is very energy intensive so instead of burning fossil fuels causing the droughts and water shortages let’s look at how we can use more renewables.
A responsible industry will also need to do more to encourage behavioural change to revaluate our water consumption. The average Londoner uses 164 litres of water per day – about 1.5 bathtubs and is 14 per cent more than the national average.
Access to clean drinking water is a human right. We must ensure the industry is run in the interests of the many not the few. With water leaking out of the pipes, and climate change happening now, I believe it’s time to take back control of our water companies.
Luke Pollard MP is Labour’s shadow environment minister with responsibilities for water, fisheries, flooding and coastal communities. He is the member of parliament for Plymouth Sutton and Devonport.