Public water supply and sanitation in England and Wales has been characterised by universal access and generally good service quality. Salient features of the sector in the United Kingdom compared to other developed countries is the full
privatisation
Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
of service provision and the pioneering of independent economic regulation in the sector in Europe. There has been a substantial increase in real tariffs between 1989 and 2005, whilst independent assessments place the cost of water provision in the UK as higher than most major countries in the
EU. The government body responsible for water regulation, together with the water companies, have claimed improvements in service quality during the same period.
Water resources and uses
![Major water transfer schemes in England and Wales map](https://upload.wikimedia.org/wikipedia/commons/c/ce/Major_water_transfer_schemes_in_England_and_Wales_map.svg)
On average, only about 10 percent of freshwater resources in England and Wales are abstracted. Water companies abstract almost half of this amount. The remainder is used for cooling power plants, other industries, fish farming and other uses. Water companies use mainly surface water (two thirds), but also groundwater (one third).
The amount of water available in England and Wales to meet the needs of people and to sustain the water environment varies greatly between different places and seasons, and from one year to another. Parts of Wales and the
English Lake District
The Lake District, also known as the Lakes or Lakeland, is a mountainous region in North West England. A popular holiday destination, it is famous for its lakes, forests, and mountains (or ''fells''), and its associations with William Wordswor ...
are well endowed with water, while water is scarce in parts of Eastern and Southeastern England. Parts of England were affected by severe drought in 1976, 1995 and 2005-2007.
Household water use in England and Wales stood at about 145 litres/capita/day in 2008/09.
[Environment Agenc]
Household water use in England and Wales, 1998/99 to 2008/09
, accessed on October 14, 2010 Total water supply for domestic and commercial customers in England and Wales was 14.5 million cubic metres per day in 2009.
Quality of service
The quality of water and sanitation services in England and Wales is regularly and comprehensively monitored by the economic regulator,
OFWAT
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. OFWAT statistics show that service quality has improved since the early 1990s, i.e. shortly after services were privatised. For example, the number of unplanned interruptions, properties at risk of low pressure, the share of complaints that were not answered within five days and combined sewer overflows have all declined, while sewage treatment works compliance has increased and river water quality has improved.
[OFWAT]
Water industry facts and figures
June 2008, accessed on September 23, 2010 A comparison with service quality in other areas of the European Union is difficult, since in few other countries such comprehensive water and sanitation service quality data are being published as it is being done by OFWAT.
Drinking water quality is also universally high, although isolated incidents where quality falls have occurred. For example, in June 2008 about 250,000 people in
Northamptonshire
Northamptonshire (; abbreviated Northants.) is a county in the East Midlands of England. In 2015, it had a population of 723,000. The county is administered by
two unitary authorities: North Northamptonshire and West Northamptonshire. It is ...
were being told to boil tap water for drinking after routine tests by
Anglian Water
Anglian Water is a water company that operates in the East of England. It was formed in 1989 under the partial Water privatisation in England and Wales, privatisation of the water industry. It provides water supply, sewerage and sewage treatment ...
found
cryptosporidium
''Cryptosporidium'', sometimes informally called crypto, is a genus of apicomplexan parasitic alveolates that can cause a respiratory and gastrointestinal illness (cryptosporidiosis) that primarily involves watery diarrhea (intestinal cryptosp ...
Infrastructure
Physical assets of private water and sanitation companies in England and Wales include 1,000 reservoirs, over 2,500 water treatment works and 9,000 sewage treatment works. More than 700,000 kilometres of mains and sewers are buried beneath the ground – that’s enough to stretch to the moon and back, or a distance 200 times greater than the UK’s entire motorway network.
In 2021, the UK Government Department for Digital, Culture, Media & Sport launched an open competition called 'Fibre in Water' to explore the potential for delivering broadband and mobile phone services via drinking water mains.
Responsibility for water supply and sanitation
Policy and regulation
![City of London Skyline from Canary Wharf - Sept 2008](https://upload.wikimedia.org/wikipedia/commons/b/b3/City_of_London_Skyline_from_Canary_Wharf_-_Sept_2008.jpg)
Within the government the Department of Environment, Food and Rural Affairs (Defra) has the responsibility for policy in the water and sanitation sector. The economic regulator of water companies in England and Wales is the Water Services Regulation Authority,
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. The
Environment Agency
The Environment Agency (EA) is a non-departmental public body, established in 1996 and sponsored by the United Kingdom government's Department for Environment, Food and Rural Affairs, with responsibilities relating to the protection and enha ...
is responsible for environmental regulation, and the
Drinking Water Inspectorate The Drinking Water Inspectorate (DWI) is a section of Department for Environment, Food and Rural Affairs (DEFRA) set up to regulate the public water supply companies in England and Wales.
Based in Whitehall, it produces an annual report showing the ...
for regulating drinking water quality. Drinking water standards and wastewater discharge standards in the U.K., as in other countries of the
European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
, are determined by the EU (see
EU water policy
Water supply and sanitation (WSS) in the European Union (EU) is the responsibility of each member state, but in the 21st century union-wide policies have come into effect. Water resources are limited and supply and sanitation systems are under pre ...
).
Service provision
In England and Wales, water and sewerage services are provided by 10 private regional water and sewerage companies and 16 mostly smaller private "water only" companies.
History and recent developments
Local government service provision (before 1973)
Before 1973 water and sanitation services were provided by water undertakings and sewerage and sewage disposal authorities respectively. Until the 1950s there existed over a thousand water undertakings, with administrative boundaries similar to those of local government boundaries. By the early 1970s their number had been reduced to 198 by a gradual consolidation process aimed at achieving
economies of scale
In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time. A decrease in cost per unit of output enables ...
. Out of the 198 water undertakings 64 were run by individual local government authorities, 101 by joint boards comprising several local government authorities, and 33 were statutory privately owned water companies, some of which date back to the Victorian era. At the same time there were over 1,300 sewerage and sewage disposal authorities, most of them run by individual local government authorities. The sector thus was highly fragmented.
Water resources management was entrusted to 29
river authorities created in 1965. Their responsibilities included water conservation, land drainage, fisheries, control of river pollution and, in some cases, navigation.
[Vickers, John and George Yarrow: Privatization:An Economic Analysis, MIT Press, 1988, Chapter 11: The Water Industry, p. 389-393]
Public regional companies (1973–1989)
Through the
Water Act 1973
The Water Act 1973 (1973 c.37) is an Act of the Parliament of the United Kingdom that reorganised the water, sewage and river management industry in England and Wales. Water supply and sewage disposal were removed from local authority control, ...
the government established ten
regional water authorities in order to achieve even greater economies of scale, especially in sanitation, compared to the prior gradual consolidation of water undertakings. The reform was also aimed at putting in practice the principle of integrated river basin management, especially concerning the planning of investments in
wastewater treatment
Wastewater treatment is a process used to remove contaminants from wastewater and convert it into an effluent that can be returned to the water cycle. Once returned to the water cycle, the effluent creates an acceptable impact on the environme ...
. Given the small size of many river basins in England and Wales, in practice the area covered by each of the regional water authorities typically contained more than one river basin.
The regional water authorities were not only in charge of water supply and sanitation, but also of water resources management, thus opening the possibility of conflicts of interest since the same institution was in charge of abstracting water and discharging wastewater on the one hand, and controlling these same abstractions and discharges on the other hand. The Water Act left open the possibility to contract out water supply and sanitation services to local authorities. However, in practice this did not happen, and substantial assets were transferred from local governments to the new water authorities. Since the transfer was internal to the public sector, no compensation was paid to local authorities. Local authorities also initially held a majority of the board seats of the new organisations. The private statutory water companies, which provided water to 25% of the population, escaped reorganisation and were left to operate as before.
With the election of
Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013) was Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party (UK), Leader of the Conservative Party from 1975 to 1990. S ...
in 1979 the water and sanitation sector initially remained public, but the government attempted to make the enterprises operate more along commercial lines. As a result, the number of employees in the sector declined from 61,000 in 1976 to 52,000 in 1985, real operating costs declined, tariffs were increased above the inflation rate and the share of self-financing of investments increased. However, government regulators also cut back on investments. While the industry became profitable, the rate of return on assets based on replacement cost values remained low at less than 2%. As part of the attempt to commercialise the service providers, the
Water Act 1983
Water (chemical formula ) is an inorganic, transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of Earth's hydrosphere and the fluids of all known living organisms (in which it acts as a ...
reduced the number of board members of the water authorities. However, it also eliminated the local government representation on the Boards and made all Board members appointed by Ministers, thus further centralising the sector.
Privatisation (1989)
In 1989 the government privatised the ten public regional water authorities through divestiture (sale of assets). The authorities' functions related to water resources management were separated and retained by the public sector. At the same time the regulatory agency
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was created, following the model of infrastructure regulatory agency set up in other sectors such as telecommunications and energy.
Water Industry Act 1999
The
Water Industry Act 1999
Water (chemical formula ) is an inorganic, transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of Earth's hydrosphere and the fluids of all known living organisms (in which it acts as a ...
made several important clarifications and amendments to legislation regarding the power and responsibilities of the privatised water and sewerage companies. These include:
* Removing the right of a water company to disconnect customers on the basis of outstanding unpaid bills.
* Clarifying that water companies can continue to charge customers using rateable value where no water meter has been installed at a property.
* Allowing consumers to request a water meter, and obliging the local water company to install a meter unless the installation is not reasonably practical or would incur an unreasonable expense.
Retail market for businesses
Since 1 April 2017, most businesses and organisations in England have been able to choose which company supplies their retail water services. Deregulation was designed to deliver lower bills, increase water usage efficiency and improve customer satisfaction. , the deregulated non-household market includes 1.2 million businesses, charities and other organisations.
The Welsh government decided not to pursue deregulation, except for large industrial users that consume over 50 million litres of water annually.
Foreign ownership
A 2022 study, found that over 70% of the English water industry is in foreign hands (foreign ownership).
Financial aspects
Tariffs
Tariff level. Water and sanitation tariffs in England and Wales have increased by 44% in real terms between 1989 and 2008–09 and are among the highest in the world. The average household water and sewage bill in England and Wales was £330 in 2008-09.
[OFWAT. 2008]
Water industry facts and figures
According to a 2006 survey by NUS Consulting Group the average
water tariff A water tariff (often called ''water rate'' in the United States and Canada) is a price assigned to water supplied by a public utility through a piped network to its customers. The term is also often applied to wastewater tariffs. Water and wastewat ...
(price) without sewerage in the U.K. for large consumers was the equivalent of US$1.90 per cubic metre. This was the third-highest tariff among the 14 mostly OECD countries covered by the report. A study commissioned by the German industry association BGW in 2006, compared the average household water and sanitation bill (as opposed to the tariff per cubic metre that the NUS study used as a comparator) in four EU countries. This study showed that water bills in England and Wales were the highest among the four countries. Average water bills (excluding sanitation) were 295 euro per year in England and Wales, higher than in Germany, France (85 euro) or Italy (59 euro).
Comparison of annual water and sanitation bills in four EU countries:
Source: Metropolitan Consulting Group: VEWA - Vergleich europaeischer Wasser- und Abwasserpreise, 2006, p. 7 of the executive summary
[Metropolitan Consulting Grou]
Comparison of European Water and Wastewater Prices
, May 2006, accessed on September 23, 2009
Taking into account differences in subsidies and service quality, the cost of supplying water at an equalised service level would be 84 euros in Germany, 106 euro in both France and England/Wales, and 74 euro in Italy.
Concerning sanitation, unequalised tariffs are the highest in Germany at 111 euro per year, 93 euro in England and Wales, €90 in France and only €40 in Italy. Equalised costs net of subsidies are, however, highest in England and Wales with €138, followed by France (€122), Germany (119 euro) and Italy (85 euro).
Tariff structure and cross subsidies. Metered connections are charged at a volumetric rate, while unmetered connections are charged at a flat rate based on the rateable value of the property. The rateable value system was intended as a cross subsidy from wealthier to poorer households. However, since rateable values are often outdated, the subsidy is poorly targeted. Since more and more highly rated households opt for metering, flat rates for the remaining unmetered customers are being increased to compensate for the lost revenue. As a result, the already imperfect cross-subsidy system is unwinding. An Independent Report on Charging for Household Water and Sewerage Services published in 2009 by
Anna Walker recommended a package of help to ensure that "the transition to metering is not to cause real problems of affordability to those on low incomes".
Tariff review procedures. Water and sanitation tariffs are regulated by OFWAT, which sets caps for tariff changes over five-year
asset management plan period An asset management plan (AMP) period is a five-year time period used in the English and Welsh water industry. It is used by the Water Services Regulation Authority to set allowable price increases for the privately owned water companies and for th ...
s. In the 2000–2005 review period OFWAT mandated an average annual reduction of tariffs of 1.6%. However, in the 2006–2010 review period it has allowed an average annual increase of 4.2%.
Affordability. As a proportion of income, in England and Wales the cost of water and sewerage together works out at less than 1.5% of weekly earnings.
More details on tariffs in England and Wales are provided in OFWAT's annual reports on water and sewerage charges.
Investment and financing
Average annual investments in water and sewerage in England and Wales were £3.3 billion in 2000–2005 and £3.6bn in 2005–2010, according to OFWAT,
which corresponds to £61 per capita per year. According to the industry association
Water UK
Water UK is the trade association representing the water companies of the United Kingdom
Water (chemical formula ) is an inorganic, transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of ...
, between 1980 and 2010 the water and waste
water industry
The water industry provides drinking water and wastewater services (including sewage treatment) to residential, commercial, and industrial sectors of the economy. Typically public utilities operate water supply networks. The water industry doe ...
in England and Wales will have invested over £88bn.
Investments are financed primarily through self-financing and borrowing in the capital market. In March 2006 overall borrowing stood at £23.5bn for England and Wales. Net returns on this borrowing in 2006 were 6.6%.
Efficiency (water losses)
Efficiency of service provision has many dimensions, of which only one (water losses) is treated here.
According to OFWAT leakage in England and Wales has declined significantly from 228 litres/property/day in 1994-95 to 141 L/p/d in 2006–07, enough to supply the needs of 10 million people.
According to the Environment Agency, many companies in the UK have reduced their water loss to the economic level of leakage. This is the level at which, in the long-term, the marginal cost of leakage control is equal to the marginal benefit of the water saved. The rate of reduction in leakage has slowed for many companies because the most obvious causes of leakage have been detected and addressed, leaving only less apparent leakage problems. Models have been developed and fine-tuned to assess the economic level of leakage. A summary of the debate on these models can be found in a recent report by OFWAT.
According to a comparative study commissioned by the German
water industry
The water industry provides drinking water and wastewater services (including sewage treatment) to residential, commercial, and industrial sectors of the economy. Typically public utilities operate water supply networks. The water industry doe ...
association BGW average water losses in the distribution network in England and Wales have been estimated at 19 percent. They are lower than in France (26 percent) or Italy (29 percent), but higher than in Germany, where they are apparently only 7 percent.
The study states that its methodology allows for an accurate comparison, including water used to flush pipes and for firefighting. This is consistent with the International Water Association's definition of
non-revenue water
Non revenue water (NRW) is water that has been produced and is "lost" before it reaches the customer. Losses can be real losses (through leaks, sometimes also referred to as physical losses) or apparent losses (for example through theft or meterin ...
, which includes authorised non-metered consumption such as for flushing and firefighting.
OFWAT does not use percentage figures when it assesses leakage levels. Also it assesses only leakage and not broader losses. It is thus difficult to compare figures from the comparative study cited above with OFWAT figures for England and Wales.
Metering
A particularity of water tariffs in England and Wales is the low share of metering. Most users are not billed on a volumetric basis and have no financial incentive for water conservation. Since the 1990s efforts have been made to increase the share of household metering, which reached 33% in 2008 for the UK.
The Environment Agency would like to see 75% of households metered by 2025. Studies show that water meters lead to a 5-15% reduction in household water use. Meters are typically only installed at the request of customers.
In 2006 the Environment Agency announced it favours compulsory metering in water-scarce southern England. The measure is controversial. Consumer groups fear it will penalise poorer families with many children, and the disabled, who use more water. In March 2006 the company
Folkestone & Dover Water Services
Veolia Water Southeast (formerly Folkestone & Dover Water Services) was a privately owned company supplying water in south east Kent, England. The company's chairman was Paul Sabin.
History
The history of the Company can be traced back to Folkes ...
was granted the power to install compulsory water meters in a landmark ministerial ruling under which it was given '
water scarcity
Water scarcity (closely related to water stress or water crisis) is the lack of fresh water Water resources, resources to meet the standard water demand. There are two types of water scarcity: physical or economic water scarcity. Physical water ...
status' by Environment Minister
Elliot Morley
Elliot Anthony Morley (born 6 July 1952) is a British former Labour Party politician, who was the Member of Parliament (MP) for Glanford and Scunthorpe from 1987 to 1997 and then Scunthorpe from 1997 to 2010. In 2009, he was accused by ''The D ...
. In a written ministerial statement, Mr Morley said: 'In many parts of the country, water is a precious resource which we can no longer simply take for granted.'
Environmental criticisms
In July 2011, the think tank
Policy Exchange
Policy Exchange is a British conservatism in the United Kingdom, conservative think tank based in London. In 2007 it was described in ''The Daily Telegraph'' as "the largest, but also the most influential think tank on the right". ''The Washing ...
reported a significant decline in river quality due to abstraction carried out by water companies. The report calls for water companies to be charged more for using the most environmentally vulnerable rivers and
aquifer
An aquifer is an underground layer of water-bearing, permeable rock, rock fractures, or unconsolidated materials (gravel, sand, or silt). Groundwater from aquifers can be extracted using a water well. Aquifers vary greatly in their characterist ...
s in drier parts of the country, with cheaper rates where water is more abundant. It also called for higher water charges during droughts.
In 2009, an investigation conducted by the
BBC #REDIRECT BBC #REDIRECT BBC #REDIRECT BBC
Here i going to introduce about the best teacher of my life b BALAJI sir. He is the precious gift that I got befor 2yrs . How has helped and thought all the concept and made my success in the 10th board ex ...
's Panorama concluded that the operation of more than 20,000 Combined Sewer Overflow pipes (CSO) was leading to the routine spillage of untreated wastes around Britain's coastline, potentially leading to very dirty water around some of the most popular beaches in the UK. The CSOs, intended for use in very rare occasions, were not covered by the existing legislation for waste emissions.
Operational criticisms
A 2001 study by the
Public Services International
Public Services International (PSI) is the global union federation for workers in public services, including those who work in social services, health care, municipal services, central government and public utilities. , PSI has 700 affiliated ...
Research Unit, which is affiliated with trade unions and opposes privatisation, stated that
* tariffs increased by 46% in real terms during 1990-2000
* operating profits have more than doubled (+142%) in eight years, between 1991-2000
* investments were reduced and
* public health was jeopardised through cut-offs for non-payment.
[Hall, David and Emanuele Lobina (PSIRU]
UK Water privatisation - a briefing
, February 2001
See also
*
EU water policy
Water supply and sanitation (WSS) in the European Union (EU) is the responsibility of each member state, but in the 21st century union-wide policies have come into effect. Water resources are limited and supply and sanitation systems are under pre ...
*
Northern Ireland Water
Northern Ireland Water Limited ( ga, Uisce Thuaisceart Éireann; Ulster-Scots: ''Norlin Airlan Wattèr'') is a water company in Northern Ireland.
Formerly an executive agency within Northern Ireland Executive, it became a government-owned comp ...
*
United Kingdom water companies
Water supply and sanitation in the United Kingdom is provided by a number of water and sewerage companies. Twelve companies and organisations provide drainage and sewerage services, each over a wide area, to the whole United Kingdom; and supply w ...
*
Water Framework Directive
The Water Framework Directive 2000/60/EC is an EU directive which commits European Union member states to achieve good qualitative and quantitative status of all water bodies (including marine waters up to one nautical mile from shore) by 2015. ...
*
Water supply and sanitation in the United Kingdom
Public water supply and sanitation in the United Kingdom is characterised by universal access and generally good service quality. A salient feature of the sector in the United Kingdom compared to other developed countries is the diversity of insti ...
References
External links
Water UKOFWAT the economic regulator for the water and sewerage industry in England and Wales
Environment Agency's water quality website
Water Resources Management in Cooperation with Agriculture project
{{Water supply and sanitation by country