Drowning in debt: Here's the real reason our lakes and rivers are swamped by sewage
- Water firms have too little to invest after they borrowed billions
The Arctic char occupies a special place in angling and culinary folklore.
For centuries, this fabled fish has been prized by Lake District locals.
The only place in England where this member of the salmon family swims is in the cold, dark depths of Lake Windermere.
It has even been sold by posh supermarket chain Booths – ‘the Waitrose of the North’ – when in season. Not any more.
No sewage, please: Lake Windemere in the Lake District
Having survived since the end of the Ice Age in England’s largest freshwater expanse, the Arctic char is under threat like never before from raw sewage being dumped by water giant United Utilities directly into the lake.
In the latest incident, United Utilities – which supplies water to seven million customers in north-west England – illegally discharged an estimated ten million litres of untreated effluent into Windermere.
The Environment Agency watchdog was only notified of the pollution 13 hours after the leak started.
United Utilities should have been well aware of the risk of disaster, as there was a similar spill from the same pumping station in Bowness-on-Windermere two years ago.
That same year a separate bright green bloom of toxic algae covered miles of the lake and ‘was visible from space’, according to zoologist and local campaigner Matt Staniek.
It may seem incredible that this Unesco World Heritage site and jewel in the Lake District National Park’s crown – home to other rare and protected species such as sea lamprey and pearl mussels – can be treated in such a negligent and shocking way. But as the behaviour and finances of water companies up and down the country goes from bad to worse, it should come as no surprise.
In recent weeks there has been a litany of disasters:
- Hundreds of South West Water customers who fell ill from a water-borne parasite in their tap water in Brixham, Devon, will get just £215 each in compensation, while shareholders in the parent company, Pennon, were showered with £127million of dividends.
- United Utilities defied the Lake District sewage scandal and lavished £340million of dividends on its investors, an increase of 9 per cent on the previous year.
- Severn Trent, which supplies homes and businesses in the Midlands, raised its dividend payout by 9 per cent to £201million. Its boss, Liv Garfield, was forced to defend her £3.2million-a-year pay package. She pocketed the rewards even though the firm was responsible for more than 60,000 sewage spills last year.
- Some water companies in England and Wales want to almost double the cost of household bills over coming years to pay for upgrades to the elderly network of pipes, sewers and treatment works. Southern Water is demanding the biggest increase.
- Thames Water, Britain’s biggest supplier, is on the brink of financial collapse after shareholders in its parent company refused to put in more money, claiming that it had become ‘uninvestable’ after racking up more than £14billion of debt.
All of which raises urgent questions about just what has gone so wrong with our water industry and what can be done about it.
Since the privatisation of ten regional suppliers in 1989, the water companies, some now owned by foreign investors, have run up debts of more than £60billion. Over the same period, they have handed out £73billion in dividends to their shareholders.
Companies have spent an estimated £200billion on maintaining and improving the ageing network. Critics say it is not enough, as seen in the soaring level of sewage spilling into rivers and seas.
They also argue that dividend payouts – many to overseas owners, including state-backed Chinese shareholders – are at the expense of infrastructure investment, leaving customers to pick up the tab for cleaning the mess.
Enjoying nature: Wild swimmers from the Henley Mermaids group take a dip in the Thames
Sewage spillages more than doubled to 3.6million hours of discharges in England alone last year, compared with 1.75million hours in 2022, according to the Environment Agency.
Even Water UK, the industry body, admitted that it was ‘unacceptable’, though it blamed the record levels on heavy rain.
‘It’s got worse, much worse,’ says Laura Reineke of Henley Mermaids, a group of wild swimmers who campaign for a cleaner Thames.
‘We check the sewage maps before we swim and we know where the outlets are,’ she says.
‘But we have choice whether we go swimming or not – the wildlife has no choice. Creatures are basically drowning in a sea of toxic chemicals.’
Henley is a true-blue Tory constituency, the former seat of Michael Heseltine and Boris Johnson.
But such is the state of Old Father Thames that it is set to become a big issue in the General Election on July 4.
‘There’s been a huge local outcry,’ Reineke says.
One of the Mermaids – Jo Robb – is standing as a Green candidate in the constituency, calling for Thames Water to be taken back in public ownership, ‘with all profits reinvested into improving infrastructure and service’.
‘The 35-year experiment with privatised water has failed,’ she adds. Reineke wants regulators to be ‘given their teeth back’, and to be ‘free to prosecute so we can get back to healthy, happy waterways for wildlife, fish and humans to enjoy and call home’.
‘The public are seeing bills rise sharply because of debt taken on by the owners of private companies,’ says David Hall at the University of Greenwich.
The post-privatisation business model assumed water companies would fund extra investment using borrowed money. The idea was that shareholders would receive a return in dividends, paid out of any profits the companies made.
Instead, experts say some water companies have paid dividends out of borrowed money, not profit.
They may have got away with that when interest rates were near zero throughout the last decade. But rising borrowing costs have pushed Thames Water to the edge and threaten the financial viability of much of the sector.
‘It is a disaster of its own and the regulators’ making,’ says Oxford University economics professor Dieter Helm, who points the finger at Ofwat for allowing this form of financial engineering, especially at Thames Water.
‘Badly managed and financially engineered, if ever there was a case to pull the plug, re-set and get a new set of owners and managers, Thames Water is the case.’
It's a char: The Arctic char occupies a special place in angling and culinary folklore
Ofwat said companies were ‘best placed’ to make their own funding decisions and that it had also ‘raised concerns’ about debt levels, especially at Thames Water.
Back in the Lake District, Matt Staniek will tomorrow stage a protest outside United Utilities’ ‘information centre’ in Windermere – as he’s done for the past 30 Mondays.
He vows to keep going until the firm commits to stop putting sewage in the lake. But he has other targets in his sights. He launched an online petition calling for a public inquiry into how the sector is regulated. It has picked up almost 100,000 signatures.
He is critical of the Environment Agency’s response to the latest spill too, saying: ‘It sampled on the shoreline not in the middle of the lake where the outflow pipe goes. That’s got nothing to do with lack of resources. It’s incompetence.’
The agency, which has seen big cuts to its enforcement budget in past years, rejected his claims.
‘We’re undertaking a thorough investigation, examining further evidence from United Utilities,’ the agency said.
‘If we determine a permit breach has taken place, we will not hesitate to take enforcement action, up to and including a criminal prosecution.’
United Utilities blamed a third-party telecoms fault in the area, which it was not told about.
‘Our engineers took urgent steps to resolve the situation,’ it said, once the company had found out the pumping station had been affected.
It said the agency was notified ‘within an hour of the pollution being confirmed’ adding that, since 2000, £75million had been spent upgrading wastewater treatment sites, pumping stations and sewers around Windermere.
Some aspects of Windermere’s water quality, such as phosphorous levels, have improved while the lake’s average temperature has also risen due to climate change.
That might be little consolation for the poor Arctic char, now believed to be extinct from the southern end of Windermere. There is still hope, however.
At Lake Annecy in the French Alps, where Arctic char can also be found, the species came under similar threat in the 1970s.
The fish are now thriving again after the French authorities banned sewage discharges into the lake.
Staniek says a similar course of action on Windermere is needed to save the char – and the lake itself.
He says: ‘A river has flow, but a lake captures pollution that is dumped into it. That is why complete removal of all discharges is the only option.’
In other words, stop the sewage – now.
The chronic lack of investment in water infrastructure since privatisation is perhaps best illustrated by the case of Carsington Water.
Nestled on the edge of the Peak District, this reservoir of eight miles circumference supplies homes in Derbyshire and the east Midlands.
The beauty spot, owned and operated by Severn Trent, is a popular attraction for walkers, cyclists, birdwatchers and watersports enthusiasts.
Yet Carsington has another claim to fame. Incredibly, no new drinking water reservoirs have been built in England and Wales since Carsington opened in 1992.
Since then, the UK population has increased by ten million to 67million, placing enormous pressure on a distribution network that leaks a fifth of the water it carries.
And the situation is only going to get worse unless drastic action is taken.
The Government’s National Infrastructure Commission has warned that to avoid the risk of severe drought, extra water supply and reduced usage totalling at least four billion litres a day is needed by 2050.
That means capacity needs to be boosted by an extra 22million bath tubs of water, every day.
New drinking water reservoirs are planned. Anglian Water is building two – one in Lincolnshire and another in Cambridgeshire – at a cost of more than £4billion while Portsmouth Water hopes to have a new £325million facility on stream by 2029.
But inevitably bills will go up to keep the nation’s taps running.
