Hall, David, Lobina, Emanuele ORCID: https://orcid.org/0000-0003-4774-0308 and Gray, Conor (2026) Clean water: a case for public ownership (2026). [Working Paper]

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Abstract

England and Wales’s privatised water system—unique in the world for its full divestment of water and sewerage assets—has failed on every major promise made at privatisation. The report shows that prices have more than doubled in real terms, environmental performance has deteriorated, and private owners have extracted vast sums while investing none of their own capital. As the document states, “the prices charged are now more than double in real terms their level before privatisation” and “shareholders have actually taken out over £95 billion since privatisation.” Water and sewerage systems were historically created and financed by municipalities, not private capital. The 1989 privatisation was justified on claims of efficiency, investment, and consumer benefit—none of which materialised. Instead, the government subsidised the new companies with £5.7bn in transferred profits, £6.5bn in debt write offs, and a £1.5bn “green dowry.” Ownership has since consolidated into opaque international financial groups, sovereign wealth funds, and private equity. UK pension funds hold just 1% of shares in the listed water groups. Privatisation abolished democratic oversight and replaced it with regulators structurally biased toward company profitability. OFWAT’s statutory duty prioritises ensuring company profits over consumer protection. The report highlights that OFWAT even granted companies 25 year notice periods before licences can be terminated—effectively “eternal” monopolies. Regulators have been weakened by government cuts and corporate capture, with a revolving door between OFWAT and water companies. Public trust has collapsed: only 23% of people believe companies act responsibly. OFWAT has approved a 36% real terms bill increase for 2025–30, front loaded with a 26% rise in the first year. Yet companies routinely underspend on capital investment while extracting dividends. Between 2020–25, £5.6bn was paid out; since 1990, £89.6bn has been extracted in dividends alone. Shareholders have not financed the investment. Instead, consumers have paid for nearly all capital expenditure, while companies have accumulated £75bn in debt—largely used to fund dividends. Under investment has driven widespread sewage pollution and chronic leakage. Sewage spills more than doubled to 3.6 million hours in 2023. Leakage remains high, with some companies, including Welsh Water, falsifying performance data. The report notes that overspills stem from “chronic under capacity of the English wastewater systems.” Globally, 90% of water systems are public. Scotland’s public model delivers higher investment, lower bills, and far lower financial waste. International remunicipalisation—from Paris to Berlin—demonstrates the advantages of democratic, non profit water management. Public ownership in England and Wales would eliminate financial extraction, restore democratic accountability, and enable long term planning for environmental resilience. The report outlines three viable routes to achieve public ownership:
1. Normalising licences and allowing them to expire within 1 year.
2. Special Administration, enabling transfer to public bodies without compensation.
3. Legislation, with compensation determined by Parliament—not market value.

Andrea Egan, General Secretary of Unison, writes in her foreword: "This report exposes the structural weaknesses at the heart of privatisation: a model built on financial extraction, weak regulation, and a lack of democratic accountability. It also shows that this is not inevitable. Across much of the world, water services remain in public hands and are delivered more effectively, more transparently, and at lower cost. UNISON is committed to securing a system that works in the public interest—one that ensures safe, sustainable and affordable water for all. Central to that vision is public ownership, democratic oversight, and a properly resourced workforce delivering essential services. The debate on the future of water is now firmly in the public domain. This report provides the evidence base to inform that debate and to support the case for change. Doing nothing is not an option. It is time to act."

Item Type:	Working Paper
Uncontrolled Keywords:	water, sewerage, public ownership, privatisation
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HJ Public Finance
Faculty / School / Research Centre / Research Group:	Greenwich Business School Greenwich Business School > Executive Business Centre Greenwich Business School > Political Economy, Governance, Finance and Accountability (PEGFA) Journal of Economic Literature Classification > Political Economy, Governance, Finance and Accountability (PEGFA) Greenwich Business School > Political Economy, Governance, Finance and Accountability (PEGFA) > Public Services International Research Unit (PSIRU) Journal of Economic Literature Classification > Political Economy, Governance, Finance and Accountability (PEGFA) > Public Services International Research Unit (PSIRU)
Last Modified:	03 Sep 2026 11:18
URI:	https://gala.gre.ac.uk/id/eprint/54313

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