The Scale of the Failure
Every English water company dumped raw sewage into rivers in 2024. The total: 450,398 sewage discharges. Three billion litres of water leak from their pipes every single day. Only 15% of English rivers are in good ecological health. Meanwhile, since privatisation in 1989, water company shareholders have extracted 85 billion pounds in dividends. The companies have accumulated 60 billion pounds of debt, largely to fund those dividends. Now they want to raise customer bills by 26% to fix the infrastructure they allowed to deteriorate for three decades. They were given a privatised monopoly, an obligation to maintain infrastructure, and access to customers who had no choice. They took the money and did not maintain the infrastructure. The experiment has failed.
A. Nationalisation With Debt Offset
The National Interest Acquisition Act 2027 brings every English water company into public ownership through a single public corporation: Water England. Compensation is calculated by deducting the company's outstanding debt and outstanding regulatory fines from a fair market value assessment, which is based on the Regulated Asset Base.
- Thames Water: carrying approximately 18 billion pounds of debt, multiple active enforcement notices. Market value minus debt and fines leaves minimal residual value
- Severn Trent, Yorkshire Water, Anglian: less leveraged, higher residual compensation
- Where compensation is close to zero, shareholders lose because they allowed debt to accumulate in an asset they were supposed to maintain. This is not confiscation. It is the natural consequence of financial management that treated the debt capacity of a monopoly as shareholder value rather than customer and infrastructure value
- Compensation bonds issued at Bank of England base rate, redeemable over 20 years. No cash outflow on day one
B. Abolish Ofwat
Ofwat has been the regulator for 35 years. Under its watch: 85 billion pounds extracted in dividends, 60 billion pounds of debt accumulated, 450,000 sewage discharges in a single year, and 15% of rivers in good health. The institution has failed in its statutory purpose. It is abolished. In its place: the Water Quality and Infrastructure Authority, a single public body responsible for water quality standards, infrastructure investment, tariffs, and performance, reporting directly to Parliament. Its chief executive and board are appointed by Parliament, not by ministers, and can be recalled by Parliament.
C. Bills Frozen for the Parliament
No real-terms increase in customer water bills for the duration of the parliament. The 2 to 3 billion pounds annually previously extracted as dividends is reinvested into infrastructure. Every pound of operating surplus goes to pipes, treatment works, and river restoration. The argument that bills must rise to fund investment collapses when you remove the shareholder extraction that was absorbing the investment headroom.
D. The 25-Year Cleanup Plan
It took 35 years to break the system. It will take 25 years to fix it. The plan is honest about this timeline.
| Phase | Timeline | Investment | What it delivers |
|---|---|---|---|
| Emergency | Years 1 to 5 | £20bn | Fix the worst 1,000 storm overflow points. Replace the most leaking trunk mains. Stop the worst river pollution at source. End the emergency discharges that make rivers genuinely toxic. |
| Major infrastructure | Years 5 to 15 | £60bn | Rebuild 1,700 treatment works to modern standards. New combined sewer systems separating stormwater from sewage in major cities. Three new reservoirs: the first since Kielder in 1981. |
| Full restoration | Years 15 to 25 | £40bn | Every river in England restored to good ecological status. Wetland restoration at scale. Catchment-level flood absorption aligned with the Dutch flood defence model (Section VIII). |
Total: 120 billion pounds over 25 years. Funded directly from customer bills with no profit margin extracted. The private companies were supposed to make this investment from the 35 years of customer bills they received and chose instead to pay dividends. The public corporation makes the investment that the private ones did not.
E. How It Is Funded
Bills are frozen in real terms for the parliament, then rise by CPI only for the 25-year cleanup period. The infrastructure investment of 120 billion pounds over 25 years is funded from:
- Customer bills (no profit extraction): Water England's entire revenue surplus goes to infrastructure, not shareholders. Currently around 2 to 3 billion pounds annually goes to dividends. Under public ownership, this funds the programme directly
- Green infrastructure bonds: Water England issues publicly-backed green bonds at government borrowing rates (far cheaper than private company debt), with the bonds specifically for infrastructure investment and ring-fenced from operating expenses
- Reduced interest costs: Private water companies borrow at 4 to 6% interest rates. Water England borrows at the gilts rate, currently around 4 to 4.5%. On 60 billion pounds of inherited debt, refinancing alone saves 1 to 2 billion pounds annually
F. Real-Time Sewage Transparency
Live overflow discharge data published every day at the catchment level. Anyone can check their local river's pollution status in real time through a public-facing digital platform. The current quarterly, aggregated, opaque reporting system is replaced with full transparency. Anglers, swimmers, kayakers, and residents know within hours whether a river is safe.
G. Hard Targets
- 90% reduction in sewage overflow events by Year 5 versus the 2024 baseline
- 100% of rivers in good ecological status by Year 25
- Leakage reduced from 3 billion litres per day to below 1 billion litres by Year 10
- Zero unplanned service interruptions lasting more than 12 hours by Year 5
- Annual public reporting on all targets, independently verified, with consequences for the Water England board when targets are missed
H. Workers
Day-to-day services and existing workforce continue without disruption. Engineers, treatment plant staff, and customer service workers transfer to Water England with the same terms, the same pensions, and the same union recognition. The change is in ownership and incentives, not in the people doing the work. Many water company engineers have wanted to do this job properly for years and have been constrained by shareholder extraction. Public ownership removes that constraint.
The principle: water and sewerage are natural monopolies. Nobody chooses their water company. The pipes go where they go. There is no competitive market. Treating monopoly utility services as if they were competitive markets and expecting market discipline to deliver outcomes was an experiment. The experiment has produced 35 years of data. The data says it failed. Whatever the next chapter is, this one is over.
Why This Works
Public water systems exist throughout the world: Scottish Water, Welsh Dwr Cymru, and Northern Ireland Water all in the UK. Most of continental Europe. They deliver lower bills, less debt, fewer sewage discharges, and steady infrastructure investment. The English exception, of fully privatised regional monopolies, has not delivered any of those outcomes. The evidence, after 35 years, is conclusive.