With rising bills, deteriorating river health and a lack of investment, regulators face an uphill battle to stabilise the industry

What’s wrong with the system?
Bills have gone up – Ofwat estimates that they will be 67% higher in real terms in 2025-2030 than they were in 1989-1994 – but customers widely believe they are receiving a worse service. Some have suffered serious outages, most recently in Kent and Sussex, where about 30,000 households were left without water for up to six days in January. Many complain of low pressure and the regular imposition of hosepipe bans, when an estimated three billion litres of water are lost to leaks every day in England and Wales. By far the biggest complaint, though, is about pollution: water companies discharged untreated waste into England’s rivers and seas 450,398 times in 2024. Some 14,500 sewage overflow pipes, which are meant only to operate in emergencies, discharged for a total of 3.6 million hours. Just 15% of rivers in England are deemed to be in good health.

How is the water system structured?
The industry was privatised in 1989, when the 10 publicly owned water and sewerage authorities that served England and Wales were floated on the London Stock Exchange. Under the Water Act 1989, the government wrote off their debts to the tune of £5 billion, and gave them a “green dowry” of £1.5 billion between them to fund infrastructure improvements. Now, there are 11 large regional water and wastewater companies in England and Wales, and only three of them are still listed on the stock exchange. Seven are privately owned by investor consortiums; Welsh Water operates as a not-for-profit. Scotland’s water, meanwhile, remains largely in public ownership. Water companies are regulated by four independent bodies: Ofwat (which sets price controls and supervises economic matters); the Environment Agency (which leads on pollution in England); Natural Resources Wales (which does the same in Wales); and the Drinking Water Inspectorate.

And what’s behind the problems?
Insufficient investment in pipes, sewage systems and other infrastructure has left the network in a very poor condition. This is the consensus, encapsulated in last year’s independent review led by Jon Cunliffe, a former deputy governor of the Bank of England. At the same time, the system faces considerable strain from a population that has grown by millions since 1989, and from droughts and floods linked to climate change. Cunliffe also reflected a broad consensus that the existing regulatory framework has failed. 

How have regulators failed?
Having multiple regulators with overlapping remits means no single body is accountable. Ofwat has historically prioritised keeping bills low, at the expense of investment in infrastructure. It lacks specialist engineering expertise, and has been accused of “regulatory capture” (having too cosy a relationship with the companies). It has until recently tolerated very poor environmental performance; and it has approved expenditure and investment plans that have turned out to be flawed and had a negative impact on the sector. As for the Environment Agency, its enforcement funding was cut by nearly two-thirds between 2010 and 2021, from £120 million to just £43 million, seriously hindering its efficacy.

How much is privatisation to blame?
Cunliffe concluded that the first 10 to 15 years of privatisation were a partial success: they mobilised capital and infrastructure works that the publicly owned system had struggled to secure. Drinking-water quality improved; leakages fell. But from the early 2000s, privatisation led to grave problems. Water companies, often in the hands of foreign investors or private equity firms, accumulated large debts and began paying substantial dividends, which arguably prevented investment. By 2023, the companies collectively owed more than £64 billion in debt, but had extracted dividends of more than £78 billion (since privatisation). Some, notably Thames Water, have been brought to the brink of financial collapse. Yet they have continued to pay huge salaries and bonuses: in the 2024/25 financial year, the average pay of water company chief executives reached £1.1 million.

Should the water companies be renationalised?
The then environment minister, Steve Reed, prevented Cunliffe from considering renationalisation. The government argued that buying back the water companies would be very expensive (the cost to the taxpayer is often put at around £100 billion); that it would be complex administratively; and that the process would get bogged down in complex legal challenges, making it harder to address urgent issues such as pollution and investment. Cunliffe also concluded that comparable nationalised water systems were not necessarily better run than their privately owned counterparts. The campaign group We Own It, among others, disagrees, pointing out that Europe’s best water utilities, from Austria to Greece, are all publicly owned.

What is the government doing?
Last month, the government set out its full response to the Cunliffe report in a White Paper. Ofwat will be abolished and replaced with a new all-powerful “super regulator” for England and Wales. This new body will be given powers to carry out “no notice” surprise inspections of sewage treatment works and other infrastructure; there will also be regular “MoT-style” checks on water infrastructure; and failing companies will be put into a “performance improvement regime”. Ministers have pledged to halve sewage overflow discharges by 2030. The hope is that regulation will be greatly improved, while the cash will flow into infrastructure improvements: £104 billion has been promised by 2030. The one certainty is that consumers will pay: bills in England rose by 26% on average in 2025/26, and will rise by an average of 5.4% next year.

The unacceptable face of privatisation
England is unusual in its reliance on the private sector to provide water services. It’s the only country in Europe to have fully sold its water infrastructure – including pipes, reservoirs, boreholes and treatment plants – to private owners. And for critics, the unacceptable face of privatisation is Thames Water, Britain’s largest water company. After its flotation in 1989, Thames Water plc was bought first by the German utility company RWE, in 2001, and then in 2006 for £8 billion by Kemble Water Holdings Ltd, a consortium led by the Australian banking group Macquarie. Kemble did invest in infrastructure, at a level of about £1 billion per year, but Thames Water’s debt – relatively cheap at the time – rose from about £3.4 billion to around £10.8 billion, while some £2.7 billion was paid out in dividends to investors. Macquarie sold its share in 2017, having made 12%-13% annual returns. By 2024, Thames’ debts had hit £15 billion, and it was in deep crisis because, after necessary spending, it could not meet its growing debt obligations. Last year, it was given the worst pollution rating of any English water company. And its debts were so unmanageable that it needed a £3 billion emergency loan. Ministers had to prevent Thames from paying its executives large bonuses from the loan.

The Washington Post was, until recently, among the US’ most venerable papers, said Jill Abramson in The Boston Globe. Its reporting on the Watergate scandal under the legendary editor Ben Bradlee made history; the reporters responsible, Bob Woodward and Carl Bernstein, have inspired generations of journalists since; the paper’s writers and photographers were admired the world over. Alas, the Post today is a shadow of that former self, and last week it announced that it is laying off more than 300 people – a third of its already pared-back staff. Its ranks of local and international reporters are being decimated, and the sports and books sections are to close. This is not a cut. It is “a mortal wound”. And nor should it be mistaken for a “media story”, said Peggy Noonan in The Wall Street Journal. These layoffs will leave “the capital of the most powerful nation on Earth” without a major newspaper – and “during the Trump administration no less”. 

“It sucks when your job gets blown up,” said Scott McKay in The American Spectator. But let’s face it: the Post’s glory days are long over. The paper lost $77 million in 2023 and $100 million in 2024. Last year its weekday print circulation fell below 100,000 for the first time in 55 years, said John R. Puri in National Review. The companies that own The New York Times and The Wall Street Journal, meanwhile, are making record profits. You can’t blame Jeff Bezos, who bought the Post in 2013 for $250 million, for rationalising the business. If all those fulminating about these cuts had actually read the output of the Post’s now-unemployed journalists, they’d still have their jobs. 

Bezos isn’t bothered about the Post’s operating losses, said Alex Kirshner on Slate. With a net worth of $240 billion, he could sustain them for “hundreds of lifetimes”. When he bought the paper, he made much of the fact that he wasn’t driven purely by a profit motive. But latterly, he seems to have used his ownership of the Post to appease Donald Trump and so boost the fortunes of his other interests, such as Amazon and Blue Origin. He stepped in to stop the paper endorsing Kamala Harris for president – a decision that cost it 250,000 subscribers. He shifted the paper’s opinion section to be more pro-Trump; he made not a squeak of protest when the FBI recently raided the home of a Post reporter, seizing her devices. Bezos hasn’t just presided over the Post’s decline; he’s deliberately accelerated it, for the sake of “his own bottom line”.

Denise Welch has spent most of the past three decades in the public eye – as a star of “Coronation Street” in the late 1990s; as a regular on TV’s “Loose Women” known for her outspoken views, from 2005; and more recently, as the mother of rock star Matty Healy. Now, at 67, her career is going into overdrive: she is in demand for acting roles, and is also being held up as a style icon, with features in fashion magazines and her own entourage. “I’d always been a bit jealous of people who had a team,” she explains – so she hired a stylist, a hairdresser and a publicist, and in this way she helped create her own “renaissance”. 

It’s great to see her in such good form, says Simon Hattenstone in The Guardian, because she hasn’t always been. For years, she struggled with depression, and when that led to alcohol and drug addiction, she became a target for the tabloid press. Her phone was hacked; her hotel rooms were bugged; and she was pursued relentlessly by the paparazzi. At the height of the intrusion, when her private conversations were making their way into the papers, she began to distrust even her closest friends. “I was so paranoid,” she recalls. 

She only found out the truth in the mid-2010s, when police presented her with the evidence. “You sit at Putney police station and there’s a spreadsheet of years of your life, phone calls you made, places they’d rented across from you to spy on you for two weeks. And you’re thinking, ‘Oh my God!’”