At a time when we have seen some of the wettest weather for months, (but after two years of very low rainfall), we are as far as our water companies are concerned still in a drought situation. So it is perhaps worth looking at the water companies and how they manage the pipe work system they provide our water through.
Now you would imagine that it is in their interest to protect such a valuable resource? However every day, 3.4bn litres of water leaks from the system, almost a quarter of the entire supply. A drought has been declared across southern and central England, with no end in sight for the hose pipe ban imposed in many places, so one assumes this loss must be a worry to the water companies?
Since the privatisation of the water industry in 1989, Ofwat has set leakage reduction targets for the 21 water companies, which operate local monopolies across England and Wales. Analysis of the data, supplied to Ofwat by the companies themselves, reveals:
• Eleven companies have targets of zero reduction of leaks by 2015. They include Yorkshire Water, which failed to meet its 2010-11 targets and as a result was required to spend an additional £33m on leak repairs.
• Leaks have been reduced across England and Wales by only 5% over the past 13 years.
• The worst-performing company, Southern Water which supplies Sussex, Kent, Hampshire and the Isle of Wight, missed its latest leak target by 16% and had to pay £5m back to customers, but will be allowed to increase its leakage by 6% by 2015.
• The 25-year management plans of the water companies envisage reducing leakage by only 10% in that time.
Ofwat and the water industry highlight a one-third reduction in leakages since privatisation, but over the past 12 years, year-on-year leakages have increased as often as they have fallen, suggesting no long-term downward trend. However, the average annual customer bill for water has risen by £64 since 2001 and is now £376, while the companies collectively made £2bn in pre-tax profits and paid £1.5bn in dividends to shareholders in 2010-11.
It costs more to repair leaks than the immediate value of the water itself, so while it makes financial sense for a water company to ignore leaks, it certainly doesn’t stack up in the long-term for us, the consumers, or for our environment. There are more than 210,000 miles of water pipes across England and Wales, a length equivalent to eight times the circumference of the Earth, which serve 23m properties. Ofwat say it would cost £100bn to replace all the pipes in England and Wales, and this would only half the leaks as new pipes start to leak quickly.
But surely some additional effort can’t be a bad idea – or is it all about profits?