David Black, chief executive of Ofwat, also said that old pipes were not to blame for leaks and that most companies were meeting their leakage targets. Water companies have come under fire as England faces water shortages. Some houses have run out of water, rivers have dried up and farmers are facing crop failures. Many are furious with the companies for failing to invest in tanks, fix leaks and stop sewage pollution from their pipes. Bosses at England’s water companies have been criticized for bankrolling £58m in pay and benefits over the past five years. Since the privatisation, shareholders have been paid £72bn in dividends. The cash came from heavy debt, with companies borrowing £56bn, and from large bills, with prices up 40%. But Black said critics did not give the companies enough credit for actions taken to reduce leaks and improve water supplies and suggested they did not understand the “complex” issue. He told the BBC’s Today programme: “There is not enough accounting of what is happening in the sector. we appreciate that it is complex and difficult to understand.” Ofwat has the ability to fine companies 10% of their turnover if they fail to meet the targets. Despite high levels of leakage, many companies are meeting these targets, which has led campaigners to question whether they are being strict enough. For example, Thames Water has 11,000 leaks across its system but falls short of the regulator’s standards. Black said: “Thames Water doesn’t compromise on performance, in my opinion. There are risks of leaks in networks. Some of the biggest problems we face in networks are in modern infrastructure, it’s just not the case that it’s because of old pipes.” Many also criticized the water companies as no new large reservoir has been built since privatization in the 1980s, but Black said they didn’t need to. He said: “The reason there were no reservoirs is that demand had actually fallen during that period.” Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. He also defended the high pay of the water company’s bosses and shareholders, saying it made them more competitive in the global market. Campaign officials said they disagreed with Black’s assessment and were shocked that he suggested they didn’t understand the issue. Stuart Singleton-White, head of campaigns at the Angling Trust, said: “It is distressing to hear Ofwat, who are complicit in our broken water sector, acting as apologists for this system and the water companies. Ofwat has prevented much needed investment and allowed companies to make huge profits and destroy our rivers.” Christine Colvin, director of advocacy and engagement at the Rivers Trust, said: “This drought highlights that the targets and timetables agreed with the water sector are not enough to ensure we are climate resilient for the long term. Why are we now talking about expensive inter-basin transfers when we are leaking a fifth of our water supply?’ Some MPs also believe Ofwat should take tougher action against water companies. Philip Dunne, the Conservative MP and chairman of the environmental scrutiny committee, said the regulator needed to do more to restore public confidence in water companies. He told the Guardian: “The performance of water companies is in the spotlight now more than ever. Sewage pollution incidents and leaks that waste 20% of our network’s water supply every day are eroding public trust. It is clear that much needs to be done to make our water sector fit for purpose, especially as the effects of climate change are likely to worsen water scarcity in the coming decades. “To drive meaningful improvements, water company boards must be encouraged to develop water management and treatment plans and work with regulators to ensure they can be delivered.” Ofwat declined to comment further.
