When we think about our water we usually look first to the high quality drinking water and wastewater services that we pay for through our local charges. The value of our water services, however, goes far beyond our mains and sewers and contributes to almost all areas of our lives: our personal well-being; the health of our rivers and streams; cleaner beaches; recovering wildlife; new resources; reduced flooding; and a strong economy.
• Water services
• Water companies
• Water policy
• Water investment
• Water finance
• Water infrastructure
• Water and climate change
• Water regulation
Each day the UK water industry collects, treats and then supplies more than 17 billion litres of high quality water to domestic and commercial customers and then collects and treats over 16 billion litres of the resulting wastewaters, returning it safely to the environment.
The industry is made up of 12 water and sewerage service providers and 14 water suppliers.
In England and Wales the companies are privately owned. Welsh Water, which supplies services in Wales, is a not-for-profit company. Scotland and Northern Ireland each have a single water and sewage service provider (Scottish Water and Northern Ireland Water) that are in public ownership but rely upon private companies for delivery of many of their services.
Through Water UK the industry works with governments, regulators and many stakeholder organisations at national and international levels for effective policy and to highlight strategy issues of common interest.
Water UK is also a member of Eureau, the European body that represents national water organisations from across Europe.
Investment in water falls into four main categories:
• keeping the plant and infrastructure fit for purpose
• improving drinking water and environmental (wastewater service) quality
• ensuring a satisfactory balance between supply and demand
• improving specific customer services.
Everyone connected with the water industry understands the need for investment. The scale required and the impact on customer bills are subjects of intense debate. The main demands will come from wastewater treatment and from maintaining (even increasing) the rate of repair and replacement of assets.
The water industry in England and Wales is financed by customer bills and by outside investment. In England and Wales the amount of extra funding needed has been as much as £1 billion a year since 1990. This is why water companies are described as "cash negative".
Companies obtain much of the extra capital they need as long-term loans that operate rather like mortgages. This helps to spread investment costs over long periods and to keep customer bills down.
The collection, treatment and distribution of our water all uses physical assets. Reservoirs, mains, sewers and treatment works are the most obvious and represent around three-quarters of all assets. However, companies also need pumps, vehicles, IT, remote monitoring, control systems and other equipment. All are essential water industry infrastructure.
The repair and replacement of our underground assets – the mains and sewers, which for decades were fixed only when necessary – is a major challenge and takes a large share of investment.
Climate change is the biggest threat to the sustainability of water services. Water company operations and assets are among the most vulnerable to a more volatile climate and are already feeling the pressure. More frequent droughts, more intense rainfall and flooding are all going to influence investment planning for all aspects of water services.
The water industry’s operations are underpinned by strong regulation that covers all aspects of the industry’s core business – drinking water quality, wastewater quality, environmental improvement and price control.
Many regulations that directly affect the water industry are derived from EU directives – notably drinking water, urban wastewater treatment, water framework, groundwater protection, sewage sludge and health and safety at work. Others, for example economic regulation, are UK specific.
Water regulation
Investment & finance
Overview
3-minute read
1) Priorities and prices
Water UK briefing pdf
2) Why water services need so much investment
Water UK briefing pdf
3) Customers and shareholders investing in improvement
Water UK briefing pdf
