Our Broken Water System – and Why It’s Drowning More Than Just Trust

After years of public anger, political posturing and damning environmental data, the government’s long-awaited review of England’s water sector has landed. It is not subtle. Headed by Sir Jon Cunliffe, the report calls for the scrapping of Ofwat, an overhaul of regulation, and nothing short of a fundamental reset of how we manage, protect and invest in our most precious resource.

Water is not just a utility – it is an environmental life force. Our rivers, coastlines and aquifers are being choked by a failing system, and the damage runs deeper than most headlines suggest. From sewage in rivers to toxic sludge on farmland, and from chronic underinvestment to collapsing public trust, the story of England’s water industry is also the story of environmental neglect in a changing climate.

This blog unpacks the crisis, the science, and why the reforms now on the table are long overdue.

A System Under Fire

England saw a 60% rise in serious pollution events between 2023 and 2024, with Thames Water alone responsible for 33 major incidents. Thousands more discharges – both legal and illegal – occurred across the country’s waterways. These aren’t isolated errors. They are symptoms of a broken system that prioritised financial engineering over civil engineering, and shareholder returns over public and environmental protection.

The newly published Cunliffe Review is blunt in its diagnosis. It recommends replacing Ofwat with a powerful, integrated, environment-first regulator; ending the practice of companies marking their own homework; tightening oversight of ownership and governance structures; and introducing strategic, regional and long-term planning to finally bring coherence to an otherwise fragmented sector.

The report is clear: if we want cleaner water and healthier ecosystems, we must invest – and that will almost certainly mean higher bills. It also warns: there are no quick fixes. Even with the right reforms, reversing the damage will take years. Infrastructure is decaying, river systems are under strain, and climate pressures are only intensifying.

Who’s to Blame – and How Did We Get Here?

Water Companies

Take Thames Water. Saddled with over £16 billion in debt and a £1.6 billion loss last financial year, it is emblematic of the sector’s rot. It paid out shareholder dividends while simultaneously overseeing a surge in raw sewage discharges, including so‑called ‘dry spills’ – illegal releases even when it’s not raining.

Southern Water’s record is no better. Between 2010 and 2015 it illegally discharged sewage 8,400 times, resulting in a £90 million fine. Yet repeated offences followed, exposing the lack of meaningful deterrent in the regulatory regime.

What unites these examples is a decades-long pattern of extracting value from essential infrastructure while deferring investment. Pipes, treatment plants and pumping stations were allowed to decay. Meanwhile, executive pay and dividend flows remained remarkably healthy.

Regulators and Government

At the heart of the issue lies regulatory failure. Ofwat was not only underpowered – it was structurally misaligned. Its remit focused on consumer prices and market mechanics, not ecological resilience. Even the Environment Agency, long the last line of defence, was repeatedly sidelined and underfunded.

The wider model is also to blame. Since privatisation in 1989, England became the only country in the world to fully privatise its water supply and wastewater systems. The assumption – that private capital would modernise infrastructure while regulators protected the public interest – has not held. Infrastructure has crumbled, leakages exceed 3 billion litres per day, and not a single new reservoir has been built since 1981.

The Cunliffe Review directly targets these failures. It proposes governance reform to reduce risky debt-fuelled ownership models – but stops short of recommending nationalisation. Still, these proposals are no guarantee. Only 5 out of 88 recommendations will be immediately accepted by Parliament. The remaining 83 fall to future government discretion – and may never be implemented at all.

The Science Behind the Stench

The technical failures are as stark as the corporate ones. Most UK sewer systems are ‘combined’ – rainwater and household waste flow through the same pipes. During heavy rainfall, treatment capacity is overwhelmed, and raw sewage is discharged directly into rivers and coastal waters. These are known as combined sewer overflows.

But more alarming are the dry spills – discharges made without rainfall as an excuse. These are not just ecological disasters – they are illegal.

What happens when untreated sewage enters a waterway?

• Oxygen depletion – Organic matter fuels bacterial growth, which strips oxygen from the water, suffocating fish and aquatic invertebrates.

• Toxic contamination – Sewage can contain industrial waste, heavy metals and household chemicals, disrupting hormones in wildlife and posing risks to human health.

• Pathogen exposure – Faecal bacteria and viruses enter public swimming spots and shellfish zones, raising risks of gastrointestinal illness and antibiotic resistance.

And sewage is only part of the picture. Sludge – the semi-solid waste filtered out during treatment – is routinely spread on farmland. Yet it often contains PFAS (‘forever chemicals’), microplastics and pharmaceutical residues, leaching slowly into soils and watercourses. A Guardian investigation found that 94% of tested rivers in England exceeded proposed PFAS safety limits – 85% by more than five times.

In a warming climate, lower river flows concentrate these pollutants. As droughts intensify and rainfall patterns shift, our waterways become increasingly vulnerable.

Why This Matters – Beyond Bills and Headlines

The environment is not a side issue in this debate – it is the core casualty.

Britain’s rivers, lakes, estuaries and coastal waters are under systemic assault. These are not just scenic backdrops or recreational spaces – they are living ecosystems that underpin biodiversity, food chains and local economies. When sewage, fertiliser, pharmaceuticals and industrial waste are allowed to flow freely, the consequences cascade across entire systems.

Take the River Wye. Once famed for its salmon and kingfishers, it now regularly breaches pollution thresholds due to a mix of agricultural run-off and human waste. The River Thames, Britain’s most prominent waterway, saw nearly 300,000 hours of sewage discharge in 2024 alone – a record high. The north coast of Cornwall, Kent’s estuaries, Yorkshire’s rivers and even inner-city brooks are in similar decline.

This matters for multiple reasons:

• Ecological collapse – Oxygen-starved rivers kill fish and invertebrates essential to food webs. Sewage alters the chemical balance of aquatic systems and disrupts breeding cycles and migration patterns.

• Biodiversity loss – Habitats are fragmented or made uninhabitable. Species already under pressure from land-use change and climate stress face compounding threats.

• Public health risk – Human exposure to faecal bacteria, antibiotic-resistant microbes and chemical residues is on the rise – not just for swimmers and paddleboarders, but for farm workers and coastal communities.

• Weakened climate resilience – Wetlands and healthy rivers act as natural buffers, absorbing floodwater, cooling urban areas, storing carbon and replenishing groundwater. Their degradation reduces our capacity to cope with a hotter, more volatile climate.

• Delayed decarbonisation – Water infrastructure is energy intensive. When systems are inefficient, leaky and overburdened, they consume more energy – undermining national emissions goals and adding pressure to the grid.

And then there’s the matter of trust. For a generation taught to recycle, cut plastic, reduce food waste and embrace net zero, watching water companies pour raw effluent into local rivers while paying out billions to shareholders is more than a scandal – it’s a betrayal. Environmental standards lose all meaning when the basics are not upheld.

A Fork in the River

The Cunliffe Review isn’t setting out a handful of gradual improvements – it has the potential to be a fundamental reckoning. Its central message is that the entire model must be rebuilt from the ground up, with environmental integrity and public benefit as non‑negotiables.

Its most important recommendations include:

• Scrapping Ofwat and creating a new environment-led regulator with real enforcement powers

• Ending self-regulation by requiring independent monitoring of environmental and performance data

• Introducing regional planning authorities to tailor infrastructure to local climate and ecological needs

• Reforming ownership and governance to stop short-term extraction and enforce long-term accountability

• Committing to long-term investment in infrastructure renewal and digital monitoring, even if bills must rise

But the review comes with a caveat. Only five of its 88 recommendations are currently planned to be adopted. The rest will rely on future decisions by ministers, with no legal guarantees. The ambition is there – but the delivery is far from certain.

We now face a choice: continue patching up a failing system while nature degrades and climate risks escalate, or invest in a future where water is governed in the public interest, managed to withstand climate extremes, and valued as a vital part of a thriving environment.

The fork in the river is real. Which way we turn will define the liveability of our towns, the health of our ecosystems, and the credibility of the UK’s environmental leadership for decades to come.

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