While the world becomes drier, profit and pollution are draining our resources. We have to change our approach

by Tim Smedley

During the summer months in the Oxfordshire town where I live, I go swimming in the nearby 50-metre lido. With my inelegantly slow breaststroke, from time to time I accidentally gulp some of the pool’s opulent, chlorine-clean 5.9m litres of water. Sometimes, I swim while it’s raining, when fewer people brave it, alone in my lane with the strangely comforting feeling of having water above and below me. I stand a bottle of water at the end of the lane, to drink from halfway through my swim. I normally have a shower afterwards, even if I’ve showered that morning. I live a wet, drenched, quenched existence. But, as I discovered, this won’t last. I am living on borrowed time and borrowed water.

Water stolen from nature, drained from rivers and lakes and returned polluted, allows me to live this way. It will have to stop – not through some altruistic hand-wringing desire to do better, but because even in England this amount of water will soon be unavailable. Like many parts of the world, we are now using more water than we can sustainably supply. As surface water and groundwater levels dwindle year by year, a crisis awaits. It’s simple maths. Demand is outstripping supply.

Little old England manages to encompass many global water problems – scarcity, overabstraction, pollution, underinvestment, government and regulatory failings, environmental degradation and corporate misconduct – all within the confines of one small country in the far west of Europe.

The UK’s average annual rainfall is about 1,100mm, compared with less than 300mm in Pakistan or double figures in Egypt. However, despite our winter storms, significant parts of the UK are staring down the barrel of empty water butts. Much of that four-figure rainfall average is propped up by the rainy Highlands of Scotland, Wales and northern England. In south-east England, where I live, the average annual rainfall lingers about 600 mm – comparable with Lebanon or Kenya, and drier than Sydney, Australia. This also happens to be the UK’s most populated area, with about 18 million inhabitants packed into just 19,000 sq km, including London’s 1,500 sq km. And it’s drying up, fast. Government figures show that, in England, 28% of groundwater aquifers, the layers of porous sand and rock that hold water underground, and up to 18% of rivers and reservoirs, have more water taken out than is put back in. This is clearly unsustainable.

Not a single one of England’s rivers is classified as being in good ecological health – this includes chalk streams, a delicate habitat almost entirely unique to England. However, much of the public remains oblivious to a problem that we are all, at least in part, responsible for causing. More than half of the freshwater abstracted in the UK is for household use. The average British resident happily uses 153l of water a day, through showers, toilets, dishwashers, washing machines and garden hoses. Yet climate-change projections show that dry summers in England will increase by up to 50%, with the amount of water available reduced by at least 10-15%.

Freshwater shortages, once considered a local issue, are increasingly a global risk. In every annual risk report since 2012, the World Economic Forum has included water crisis as one of the top-five risks to the global economy. Half of the global population – almost 4 billion people – live in areas with severe water scarcity for at least one month of the year, while half a billion people face severe water scarcity all year round.

There’s only ever the same, finite amount of water churning around in our water cycle. Every drop of water on Earth has been here since the beginning of time, constantly recycled. Up to 60% of the adult human body is water (even bone is a surprisingly splashy 31%). When you die and are cremated or buried, that water will be released again, to the atmosphere or the earth. We are as intimately connected to the water cycle as rivers and lakes are.

Yet, from the Yellow River in China to the Colorado River in the United States, many rivers no longer reach the sea. Often artificially straightened and dammed, water is sucked out and channelled off to supply farms, industries and households. Great lakes, from the Aral Sea in central Asia to Lake Urmia in Iran, have nearly disappeared. Groundwater aquifers, from the Ogallala and Central Valley in the US to India’s Upper Ganges and Pakistan’s Lower Indus, are being depleted faster than they can refill. The remaining freshwater is increasingly polluted with sewage and fertilisers, causing algal blooms that smother and choke ecosystems.

According to Torgny Holmgren, executive director at the Stockholm International Water Institute, “If these trends continue, we will need 50% more water in 2050 compared with 20 years ago. And, of course, that is impossible, because water is a finite resource … This will impact all of us.”

Covid brought water issues into sharper focus. “It’s not like Covid woke us up to the need for water for hygiene; we already knew that,” Gary White, CEO of Water.org, told me. “But I certainly think we hadn’t seen the lack of access to water and sanitation as a global crisis before. When somebody [being unable to] wash their hands in one country becomes the critical link to the spread of disease, then suddenly water and hygiene becomes a global risk.” In June 2021, Mami Mizutori, the UN secretary general’s special representative for disaster risk reduction, said: “Drought is on the verge of becoming the next pandemic, and there is no vaccine to cure it.”

The good and bad news is that water crises are usually caused by human mismanagement, not climate. But, as climate breakdown bites, precipitation patterns change and climate refugees are forced to move, the timeframe to get our act together is becoming ever shorter. We are currently using up the water sources on which our very existence relies. We can continue doing that until the very last drop. Or we can decide to change our approach before it’s too late. The world isn’t running out of water – people are.

The UK’s Waterwise annual conference in 2019 was a niche water efficiency conference in London, attended by a small cadre of water industry types. But it made national news. Sir James Bevan, then chief executive of the Environment Agency, had heavily altered the prepared speech he had been given. An expected tame welcoming address instead became known as the “Jaws of Death” speech. As his audience shifted uncomfortably in their seats and a handful of trade journalists suddenly woke up, he said: “The jaws of death is the point at which, unless we take action to change things, we will not have enough water to supply our needs … many parts of our country will face significant water deficits by 2050.”

The water-abstraction system his agency oversees was “designed more than 50 years ago, for a world with less environmental protection, less demand for water and no awareness of climate change”. Just as important as new infrastructure was changing human behaviour: “We need water wastage to be as socially unacceptable as blowing smoke in the face of a baby.” The industry audience didn’t know whether to whoop or weep.

On 9 July 2020, the public accounts committee countered that all the bodies responsible for the UK’s water supply – the Department for Environment, Food and Rural Affairs (Defra), the Water Services Regulation Authority (Ofwat) and Bevan’s Environment Agency (EA) – had “taken their eye off the ball” and must take urgent action to ensure a reliable water supply. The committee’s chair, Meg Hillier MP, said: “It is very hard to imagine, in this country, turning on the tap and not having enough clean, drinkable water come out – but that is exactly what we now face … Defra has failed to lead and water companies have failed to act.”

Without significant action, the National Audit Office (NAO) forecasts that the total water demand will start to exceed supply in England no later than 2034. However, water companies have already been abstracting (extracting) too much water, leading to environmental degradation and the disappearance of rivers, including the internationally unique chalk streams of the south-east. A reduction of 480m litres a day is needed by 2045 just to lower existing groundwater abstraction to sustainable levels. Something, or someone, has to give, or the UK’s water supply will run out within a decade.

Part of England’s problem goes back to its unique system of private water companies being handed state monopolies. Prior to 1989, water supply was publicly owned, like it is everywhere else in the world. But Margaret Thatcher put a stop to that. In 1989, the 10 water authorities spanning England and Wales had their assets and personnel transferred into limited companies and floated on the London Stock Exchange. Today, almost everyone in England and Wales receives their water and sewerage services from the same 11 water and sewerage companies and six water-only companies (with some specific areas served by small limited companies). Each has its own fiefdom on the map, with no competition, run for private profit; you are obliged to sign up to your regional supplier.

The Water Act 1989 also removed previous restrictions on the statutory financial amounts water companies could borrow or pay as dividends. To protect the interests of customers and the environment, however, privatisation was coupled with regulatory oversight, most notably from the EA, the Drinking Water Inspectorate and Ofwat. Because of the lack of competition, Ofwat sets limits on the price water companies in England and Wales can charge. And, to ensure that those companies don’t just snaffle the cash and let the infrastructure they inherited fall to ruin, every five years the water companies must also submit statutory water-resources management plans setting out their intended investment approach for the next 25 years. Despite this, a fair amount of cash-snaffling still goes on. A 2017 study by the University of Greenwich found that water-company shareholders had received a total of £56bn since privatisation, with some water CEOs on £2m annual salaries.

By 2018, the then leader of the opposition, Jeremy Corbyn, was calling for the water companies to be renationalised. Even the incumbent secretary of state for Defra, Conservative MP Michael Gove, attacked the water companies for “playing the system for the benefit of wealthy managers and owners, at the expense of consumers and the environment”, and suggested that they had “shielded themselves from scrutiny, hidden behind complex financial structures, avoided paying taxes, have rewarded the already well-off, kept charges higher than they needed to be and allowed leaks, pollution and other failures to persist for far too long”. In cash terms, more than £18.1bn was paid out to shareholders of the nine largest water companies between 2007 and 2016, accounting for 95% of profits.

Australian infrastructure firm Macquarie owned Thames Water between 2007 and 2017, leaving it with £2bn of debt, while paying its investors, according to one analysis, on average between 15.5% and 19% in dividends a year. Instead of making changes to a system that was supporting such poor levels of investment, in August 2021, Ofwat approved a new £1bn equity takeover of Southern Water. The new owner was Macquarie.

Continued in Part 2