Water torture: 3,300,000,000 litres are lost every single day through leakage

After a £7.5bn investment more water is being lost through leakage now than a decade ago. The companies argue with the regulator, each accusing the other of slowing repairs, and yet they still increase their profits.

Ofwat, the water industry watchdog, faces calls for it to be overhauled amid accusations that it is not doing enough to remedy leaking drinking water while privatised water companies enjoy soaring profits and consumers face high bills.

Analysis by The Independent on Sunday shows that more water is being lost through leakage now than 10 years ago – despite £7.5bn invested in infrastructure since then.

Every day more than 3.3 billion litres of treated water – 20 per cent of the nation's supply and 234 million litres a day more than a decade ago – are lost through leaking pipes in England and Wales. The water lost would meet the daily needs of 21.5 million people.

Continuing dry weather this year has highlighted the need for action. In north-west England more than seven million people are subject to a hosepipe ban introduced by United Utilities earlier this month. Welsh Water has written to 50,000 customers asking for help in conserving supplies. Thames Water has launched a campaign aimed at persuading Swindon residents to use less water.

Environment Agency predictions show that water levels could drop by between 10 and 15 per cent over the next few decades due to climate change and population growth. In Abindgon, Oxfordshire, residents are battling plans by Thames Water to build a reservoir the size of Heathrow airport. South East Water is also facing a fight to build a new reservoir. Norman Baker, the Lib Dem MP for Lewes, argues the company should concentrate on stemming its loss of 63 million litres a day.

Industry experts say the problem lies with Ofwat, which dictates how much the companies can spend fixing leaks. Ofwat's leakage targets for the next five years will reduce the rate only marginally. Some companies say they want to bring leaks down by more than Ofwat's targets but they are not allowed to spend more than the regulator decrees on leaks. Thames, Britain's biggest water company and one of the worst offenders, is in this category.

Last November Ofwat capped water bills, telling water companies to reduce average bills to consumers to £340 over the next five years.

As a result, Severn Water warned that the £96bn projected investment across the industry over the next 20 years was in danger. And critics argue that trying to keep bills low ignores environmental consequences.

South West Water saw its profits rise by 8.7 per cent to £133m last year, while the smaller Dee Valley Water doubled profits from £3m to £6m. Thames Water's profits jumped from £605m in 2009 to £671m this year, and Northumbrian Water's profits leapt 11.5 per cent from £153m to £170m. Overall, the water companies made more than £4.5bn in the last financial year – double their profits of 10 years ago.

"It's time we reviewed the whole regime," Jacob Tompkins, head of the campaign group Waterwise, said. "We need to consider what we would be willing to pay and reconsider the regulatory regime."

Water UK, the trade body for the companies, is also calling for reform. Last month it published a wide-ranging "blueprint" for the next two years. It said that the way price controls work mean that companies have little motivation to innovate.

Barrie Clarke, a spokesman, said: "To reduce leakage to zero would be unrealistic. The objective is to make sure it is controlled in a downward trajectory."

Trevor Bishop, the Environment Agency's head of water resources, argued that a leakage level of 10 per cent should be aimed for. "Zero leakage is not a possibility," he said. "Recently some water companies have started to raise the question on how far leakage reductions could go with the right incentives, investment and innovation, and looked at possibilities for reducing leakage by as much as half today's values. That would bring leakage down to 10 per cent, which is what you see in some European countries."

A spokeswoman for Ofwat said that the water companies had invested £85bn in fixing leaks since privatisation in 1989, reducing leakage by 35 per cent since its mid-1990s peak.

"Fixing leaks can be costly. Customers have told us they don't want large rises in bills to reduce leakage. We also have to consider the serious disruption and carbon impacts caused by digging-up city streets to fix leaks," she said.

Water bosses' pay

Thames

Martin Baggs, Chief executive

His predecessor, David Owens, 58, who left the company in December 2009, received £1.52m in pay and bonuses in the previous two years and £938,000 on leaving.





Severn Trent

Tony Wray, Chief executive

Tony Wray, 45, earned £440,000 basic plus £333,700 in bonuses last year. Other expenses came to £147,600, giving a £921,300 total. He joined Severn Trent in 2005 and became CEO in 2007.



United Utilities

Philip Green, Chief executive

Green, 57, earned £798,000 and received approximately £484,386 (60.7 per cent of salary) in bonuses, to total £1,282,386. He became chief executive of United Utilities in 2006.





Yorkshire

Richard Flint, Chief executive

The "highest paid director" at Yorkshire Water earns £287,000. Flint, 42, has spent his career with the company, joining as a graduate trainee in 1992. He took over as chief executive in January this year.



Northumbrian

Heidi Mottram, OBE, Chief executive

Her predecessor, John Cuthbert, earned £295,000 and received bonuses of £51,625 to total £346,625. Mottram, 45, appointed in March, began her career as a graduate trainee with British Rail.

Anglian

Peter Simpson, Managing director

Simpson earned £692,000 up to March. He joined Anglian as a trainee after completing a chemistry masters at East Anglia University. Starting as a supply superintendent, he rose through the ranks.



Veolia

Frederic Devos, Chief executive

French-owned Veolia's "highest paid director" earns £381,000 a year. Devos became head of Veolia Water UK, Ireland and Northern Europe in 2007. He joined in 1990 after a stint as an entrepreneur.

News
peopleHowards' Way actress, and former mistress of Jeffrey Archer, was 60
Sport
Romelu Lukaku puts pen to paper
sport
News
Robyn Lawley
people
Arts and Entertainment
Unhappy days: Resistance spy turned Nobel prize winner Samuel Beckett
books
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
people
Life and Style
Troy Baker and Ashley Johnson voice the show’s heroes
gamingOnce stilted and melodramatic, Hollywood is giving acting in video games a makeover
News
i100
Life and Style
Phones will be able to monitor your health, from blood pressure to heart rate, and even book a doctor’s appointment for you
techCould our smartphones soon be diagnosing diseases via Health Kit and Google Fit?
News
people
Extras
indybest
Travel
Ryan taming: the Celtic Tiger carrier has been trying to improve its image
travelRyanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?
Sport
Usain Bolt confirms he will run in both the heats and the finals of the men's relay at the Commonwealth Games
commonwealth games
Life and Style
Slim pickings: Spanx premium denim collection
fashionBillionaire founder of Spanx launches range of jeans that offers 'thigh-trimming construction'
News
Sabina Altynbekova has said she wants to be famous for playing volleyball, not her looks
people
News
i100
Life and Style
tech'World's first man-made leaves' could use photosynthesis to help astronauts breathe
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

SAP Project Manager

competitive: Progressive Recruitment: SAP PROJECT MANAGER - 3 MONTHS - BERKSHI...

SAP Project Manager

competitive: Progressive Recruitment: SAP PROJECT MANAGER - 3 MONTHS - BERKSHI...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Microsoft Dynamics AX Functional Consultant

£65000 - £75000 per annum + benefits: Progressive Recruitment: A rare opportun...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star