Tuesday is the day water bills will start servicing debt and paying shareholders rather than fixing leaks and ending the sewage scandal, campaigners have said, dubbing it “cost of water privatisation day”.
The public services campaign group We Own It has shared analysis from the University of Greenwich that reveals roughly 31% of money collected from water bills goes towards shareholders and paying off debts. Last financial year, an average of 11% of revenue was spent on dividends and 20% went towards servicing debts, while as of 10 September 31% of 2024 remains.
According to the research, billpayers have provided enough to deliver all the infrastructure investment to date, with the industry’s £60bn debts taken on to help pay for its £78bn in dividends since privatisation in 1989.
Last week, the environment secretary, Steve Reed, laid out his plans to crack down on sewage spills, including jailing the chief executives of water companies who obstruct investigations into spillages, and banning bonuses for the bosses of companies which do not meet environmental, consumer and financial guidelines.
He also said the government would launch a review into how water companies operate but definitively ruled out nationalisation.
Experts said these measures do not go far enough, that it is highly unlikely they would lead to any water boss going to prison, and that stronger action is needed to fix the sewage crisis.
Matthew Topham, the lead campaigner at We Own It, said: “Under privatisation, it pays to pollute. Underinvestment in sewage treatment has led to spills, while funds are directed to shareholders’ pockets instead.
“When almost a third of our bills go to a shareholder surcharge, not improving our rivers and seas, it’s no wonder the public are resisting Ofwat’s plans to put up our bills.
“Any bill hikes will serve as a bailout by the public of failed private finance. Keir Starmer has the power to end this rip-off, taking the firm into public ownership for free, as recommended by the Treasury, and halving its debts using special administration.”
Matt Staniek, the founder of the Save Windermere campaign, added: “It’s very clear that the water industry is exploiting the captured billpayers of this country and regulators are allowing it. Instead of allowing water companies to unfairly increase bills, Ofwat should halt these obscene dividend payments to shareholders. Labour’s actions so far have been inadequate, despite campaigning heavily on this issue before the election. This is a scam and now Labour are the ones permitting it.”
Labour faces further pressure from campaigners as the former Undertones frontman and sewage activist Feargal Sharkey plans to lead a mass march on parliament on 26 October in a call for clean water.
A spokesperson for the Department for Environment, Food and Rural Affairs said: “This government will never look the other way while water companies pump record levels of sewage into our rivers, lakes and seas.
“That is why we have taken immediate steps to fix the broken water system as part of our wider reforms, including new powers to ban water bosses’ bonuses and bring criminal charges against law breakers.”has been contacted for comment.
This article was amended on 10 September 2024 to remove a quote incorrectly attributed to Chris Weston, the chief executive of Thames Water.
