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.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
News
i100
News
Bobbi Kristina Brown, daughter of the late singer Whitney Houston, poses at the premiere of
people
News
people
News
The frequency with which we lie and our ability to get away with it both increase to young adulthood then decline with age, possibly because of changes that occur in the brain
scienceRoger Dobson knows the true story, from Pinocchio to Pollard
Voices
The male menopause: those affected can suffer hot flushes, night sweats, joint pain, low libido, depression and an increase in body fat, among other symptoms
voicesSo the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Life and Style
health
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Project Assistant

£17000 per annum: Recruitment Genius: They are a leading company in the field ...

Recruitment Genius: DBA Developer - SQL Server

£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Office Manager

£26041 - £34876 per annum: Recruitment Genius: There has never been a more exc...

Recruitment Genius: Travel Customer Service and Experience Manager

£14000 - £17000 per annum: Recruitment Genius: The fastest growing travel comp...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen