Public failed by water regulators and government – as bills rise, spending watchdog says
Water regulators and the government have failed to provide a trusted and resilient industry at the same time as bills rise, the state spending watchdog has said.
Public trust in the water sector has reached a record low, according to a report from the National Audit Office (NAO) on the privatised industry.
Not since monitoring began in 2011 has consumer trust been at such a level, it said.
At the same time, households face double-digit bill hikes over the next five years.
The last time bills rose at this rate was just before the global financial crash, between 2004-05 and 2005-06.
Regulation failure
All three water regulators – Ofwat, the Environment Agency and Drinking Water Inspectorate – and the government department for environment, food and rural affairs (Defra) have played a role in the failure, the NAO said, adding they do not know enough about the condition or age of water infrastructure and the level of funding needed to maintain it.
Since the utilities were privatised in 1989, the average rate of replacement for water assets is 125 years, the watchdog said. If the current pace is maintained, it will take 700 years to replace the existing water mains.
The NAO said the government and regulators have failed to drive sufficient investment into the sector. File pic: PA
Water firms have grappled with leaky pipes and record sewage outflows into UK waterways in recent years, with enforcement action under way against all wastewater companies.
Despite there being three regulators tasked with water, there is no one responsible for proactively inspecting wastewater to prevent environmental harm, the report found.
Instead, regulation is reactive, fining firms when harm has already occurred.
Financial penalties and rewards, however, have not worked as water company performance hasn’t been “consistent or significantly improved” in recent years, the report said.
‘Gaps, inconsistencies, tension’
The NAO called for this to change and for a body to be tasked with the whole process and assets. At present, the Drinking Water Inspectorate monitors water coming into a house, but there is no entity looking at water leaving a property.
Similarly no body is tasked with cybersecurity for wastewater businesses.
As well as there being gaps, “inconsistent” watchdog responsibilities cause “tension” and overlap, the report found.
The Environment Agency has no obligation to balance customer affordability with its duty to the environment when it assesses plans, the NAO said.
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Thames Water boss can ‘save’ company
Company and investment criticism
Regulators have also been blamed for failing to drive enough funding into the water sector.
From having spoken to investors through numerous meetings, the NAO learnt that confidence had declined, which has made it more expensive to invest in companies providing water.
Even investors found Ofwat’s five-yearly price review process “complex and difficult”, the report said.
Financial resilience of the industry has “weakened” with Ofwat having signalled concerns about the financial resilience of 10 of the 16 major water companies.
Most notably, the UK’s largest provider, Thames Water, faced an uncertain future and potential nationalisation before securing an emergency £3bn loan, adding to its already massive £16bn debt pile.
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Water businesses have been overspending, with only some extra spending linked to high inflation in recent years, leading to rising bills, the NAO said.
Over the next 25 years, companies plan to spend £290bn on infrastructure and investment, while Ofwat estimates a further £52bn will be needed to deliver up to 30 water supply projects, including nine reservoirs.
The NAO said regulators do not have a good understanding of the condition of infrastructure assets
What else is going on?
From today, a new government law comes into effect which could see water bosses who cover up illegal sewage spills imprisoned for up to two years.
Such measures are necessary, Defra said, as some water companies have obstructed investigations and failed to hand over evidence on illegal sewage discharges, preventing crackdowns.
Meanwhile, the Independent Water Commission (IWC), led by former Bank of England deputy governor Sir Jon Cunliffe, is carrying out the largest review of the industry since privatisation.
What the regulators and government say?
In response to the report, Ofwat said: “The NAO’s report is an important contribution to the debate about the future of the water industry.
“We agree with the NAO’s recommendations for Ofwat and we continue to progress our work in these areas, and to contribute to the IWC’s wider review of the regulatory framework. We also look forward to the IWC’s recommendations and to working with government and other regulators to better deliver for customers and the environment.”
An Environment Agency spokesperson said: “We have worked closely with the National Audit Office in producing this report and welcome its substantial contribution to the debate on the future of water regulation.
“We recognise the significant challenges facing the water industry. That is why we will be working with Defra and other water regulators to implement the report’s recommendations and update our frameworks to reflect its findings.”
A Defra spokesperson said: “The government has taken urgent action to fix the water industry – but change will not happen overnight.
“We have put water companies under tough special measures through our landmark Water Act, with new powers to ban the payment of bonuses to polluting water bosses and bring tougher criminal charges against them if they break the law.”
Water UK, which represents the water firms, has been contacted for comment.
UK
Cardinal Vincent Nichols: British cardinal who will be in the conclave says picking the next pope is ‘intimidating’
The head of the Catholic Church in England and Wales has told Sky News it’s “intimidating” to be one of those responsible for choosing the next pope.
Vincent Nichols is among four UK cardinals in Rome for the Pope’s funeral on Saturday.
Following the funeral, and after nine days of mourning, cardinals from around the world will gather in the Vatican’s Sistine Chapel to cast their votes, with white smoke announcing to the world when a new pope has been elected.
Cardinal Nichols told Sky’s Anna Botting: “I hope nobody goes into this conclave, as it were, with the sole purpose of wanting to win. I think it’s very important that we go in wanting to listen to each other… It has to be together, trying to sense what God wants next. Not just for the church.”
Becoming emotional, he also said the final message he would like to have given Pope Francis is “thank you”.
The 88-year-old died peacefully on Easter Monday, the Vatican confirmed.
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Pope’s cause of death confirmed .
Heads of state – including Sir Keir Starmer, Donald Trump, Volodymyr Zelenskyy and Emmanuel Macron – have all confirmed their attendance at his funeral, which takes place on Saturday at St Peter’s Square.
Prince William will attend on behalf of the King, Kensington Palace has said.
Cardinal Nichols explained that the funeral would be “exactly the same Catholic rite as everyone else – just on a grander scale”.
In a break from tradition, Pope Francis will be the first pope in a century to be interred outside the Vatican – and will instead be laid to rest at his favourite church, Santa Maria Maggiore Basilica in Rome’s Esquilino neighbourhood.
He will also be buried in just one simple wooden coffin, instead of the traditional three coffins which are usually used for pontiffs.
Born in Crosby near Liverpool, Cardinal Vincent Nichols hoped to be a lorry driver as a child – but as a teenager reportedly felt the calling to join the priesthood while watching Liverpool FC.
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Where will Pope Francis be buried?
As cardinal, he is known for leading the church’s work tackling human trafficking and modern slavery, for which he received the UN Path to Peace Award.
He was criticised by the UK’s Independent Inquiry into Child Sexual Abuse, which said he “demonstrated a lack of understanding” of the impact of abuse and “seemingly put the reputation of the church first”.
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Cardinal Nichols, responding to the findings, previously told Sky News he was “ashamed at what has happened in the context of the Catholic Church” and promised to improve the church’s response.
He has appeared to rule himself out of the running for pope, telling reporters he was “too old, not capable”.
A man who was shot dead by police had called 999 himself, an initial investigation into the death has suggested.
David Joyce was killed by “a single gunshot wound to the abdomen” after officers shot him at close range outside Milton Keynes railway station on 1 April, according to preliminary findings.
The 38-year-old, who lived in the town, was given first aid by officers but died at the scene.
The Independent Office for Police Conduct (IOPC) is investigating the circumstances leading up to the death and revealed its initial findings.
It said it had established that Mr Joyce was armed with a 12cm steak knife when he “ran at two officers” before being shot by an officer from a Thames Valley Police armed response unit.
The IOPC said police had been alerted to the incident following a 999 call “from a man reporting that ‘there is a man with a gun down at the train station in Milton Keynes'”.
“The call handler rang back after the caller hung up during the call and spoke to the man again who said the man with the gun was acting suspiciously, looked like he was about to do something bad and ‘definitely’ had a gun,” it said in a statement.
“Records show that the mobile phone number used to make the 999 call had been used to call police before and was linked to Mr Joyce.
“CCTV footage shows Mr Joyce making a phone call at a time which matches with when the 999 call to police was made.”
Police at the scene of the incident. Pic: PA
An inquest into his death was opened and adjourned at Milton Keynes Coroners’ Court earlier in April and a full hearing will follow after the IOPC investigation concludes.
IOPC Director Derrick Campbell said: “We again extend our sincere condolences to the family and friends of David Joyce and all those affected by this incident. We continue to keep his family informed of our progress.
“Our investigators are working hard to piece together the circumstances leading up to Mr Joyce being shot by a police officer and have already carried out a significant amount of enquiries.”
He said the enquiries included accounts from the police officers involved, CCTV from inside and outside the station, footage from officers’ bodyworn cameras and police vehicle dashcam footage, and statements from members of the public who witnessed the shooting.
The IOPC added that, as is standard in investigations following a fatal police shooting, it would “look at the decisions and actions of officers prior to and during their interaction with Mr Joyce – including the medical care they provided at the scene; if the lethal force was necessary, justified and proportionate; and whether the officers followed policy”.
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