Thames Water Enshittification

Photo by Patrick Federi on Unsplash

Enshittification (thanks Cory Doctorow for that word!) turns out to be the perfect way to descibe what has happened to Thames Water since its privatisation.  Some 30 years ago water companies were privatised.  Since then they've racked up some £60 billion of debt whilst increasing the shit in our river and seaside waters.

The water companies' multi-layered corporate structures have meant they can minimise which bits of their business are subject to OFWAT regulation whilst receiving "internal dividends".  Total spending on infrastructure has also failed to rise significantly.

In last Thursday's announcement Thames Water has basically said its shareholders will now not provide £750m of new equity funding, (£500m of which was due to appear 31/3/24). Basically their explanation for this failure is that their business plan, underpinning such new equity, assumed appropriate regulatory arrangements, which have not been forthcoming from OFWAT, rendering the business plan uninvestible.

Unsurpisingly the Thames Water announcement doesn't explain that the regulatory concessions they were seeking included consumer's bills rising 40%, easier capital spending requirements and more lenient regulatory penalties.

So the essence of this story is as follows.  Privatising state owned monopolies doesn't lead to more investment or better management.  It does lead to large payouts to private owners, poorer services to customers and more damage to the environment.  And the beauty of all of this for the private owners is that, having privatised profits, if the profits/returns dry up, then the owners can simply walk away, effectively nationalising any losses.

Presumably the Conservatives are praying to the Gods of the market that Thames Water doesn't fail before the forthcoming election.

May elections are coming up - lets issue a tough sounding statement on water companies that commits us to nothing

Executive Summary - when you've got local elections coming up, make tough sounding announcements on subjects voters care about.  But don't commit to any extra resources to achieve such, or timescales within which the changes will be achieved.

(pic from https://www.sas.org.uk/water-quality/)

Political government announcements are, in a deeply distressing way, a cynical combination of fudge, misdirection, bullshit and push it into the long grass statements.

The Conservatives seem to have cottoned onto the fact that water companies pumping shit into our rivers and coastal waters isn't a good news story.  Actually its something that voters in the May local elections might be wound up about.

Obviously the private water companies are a great example of how capitalism delivers good value to capitalists, not to consumers.  In a vivid demonstration of what the supposed competitive market delivers, the privatised monopolistic companies have largely used their excessive profits since privatisation to award their shareholders and their executives, rather than investing in assets that lead to less shit in our rivers or coastal waters.

So we come to the announcement, issued on April Fools Day, (no apperent irony on that timing), from Thérèse Coffey, Environment Secretary.  Apparently she is saying that companies that pollute our waters could face unlimited penalties. And that the higher fines would be reinvested into water quality improvements.

The linked to announcement above uses the following phrases, which don't actually commit the government to any action.

 - could, not will, fine them more, and there is a 6 week consultation 1st - so the only real commitment is to a consultation.

 - Thérèse Coffey is expected to announce next week ...so its not a commitment of more £'s.

 - There is a new Plan for Water, to be published shortly - so its not a commitment of more £'s.

 - toughening up enforcement against companies who fail to deliver improvements.- but to do that you need to put in extra £'s for resources to enforce, which haven't been announced.

 - the fund will help local groups ID the biggest issues and direct investment to where it is most needed - isn't  that what the water companies were meant to be doing anyway?

And finally the annoucement  says that:

 - further detail on how the Water Restoration Fund will be managed will be set out in due course - so thats an unspecified timescale for an unseen management plan which may not have the finmes income envisaged.

 - Since 2015 the Environment Agency has secured fines of over £144 million, including £90 million from a fine imposed on Southern Water in 2021 - so since 2015 they've done one big fine on one water company.  Why haven't they done the same for all the other water companies pumping shit into our rivers and coastal waters?

Wet wipes ban - the uk government announcement that keeps on giving

It appears that Conservative MPs are doing their bit for the environment by recycling previous wet wipe ban announcements.  And yesterday they also managed to recycle Saturday's announcement about water company penalties and a national water plan.

Except that on wet wipes what they actually announced was a commitment to consult on a ban on the use of plastic in wet wipes

Yesterday in a press release the UK's Environment Secretary Thérèse Coffey said "I completely understand the concerns that people have about the health and resilience of our waters, which is why I am setting out this plan for a truly national effort to protect and improve them. That includes higher penalties taken from water company profits which will be channelled back into the rivers, lakes and streams where it is needed."  The same press release  said the plan included a commitment to consult on a ban on the use of plastic in wet wipes.  So she managed to recycle Saturdays announcement about penalties and a national water plan.

Last Saturday in a press release the UK's Environment Secretary Thérèse Coffey said "Through the Water Restoration Fund, I will be making sure that money from higher fines and penalties – taken from water company profits, not customers – is channelled directly back into the rivers, lakes and streams where it is needed. "

In a March 2022 a press release from Department for Environment, Food & Rural Affairs, the Environment Agency and George Eustice - Environment, Food and Rural Affairs Secretary - one of the commitments was to "publish responses to a call for evidence on options to eliminate the use of wet wipes and ensure they are biodegradable where needed"..

And according to a post by the UK newspaper the Mirror, apparently George Eustice (MP) proposed a  wet wipe ban in November 2021 when he held the Environment Secretary post, and in May 2018 Michael Gove first raised the idea when he was Environment Secretary.

For the water companies this ban  - if it ever happens - will also help them reduce costs as they eventiually won't have to deal with as many fatbergs blocking sewers.