England’s sewerage: what the water companies have to say

1 July 2020 | Finance

Thames Water: “We invested more than £1bn again in 2019-20, leading to a total of £15bn in the past 15 years, and we will continue to spend wisely on improving resilience, service and efficiency, as well as provide more support for customers in vulnerable circumstances.

“Our shareholders are in it for the long term and have not taken a dividend for three years to prioritise investment in improving service for customers and to protect the environment.”

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England’s water industry 2018-19 figures

1) Anglian Water

Ownership: consortium of international investment funds

Total directors’ pay: £5.3m

Highest paid director: £1.97m, Scott Longhurst, former chief finance officer

Total dividends 2010-19: £5.013bn

2) Northumbrian Water

Ownership: Cheung Kong Infrastructure Holdings, a Hong Kong-based investment consortium

Total directors’ pay: £1.96m

Highest paid director: £930,000, Heidi Mottram, CEO

Total dividends 2010-19: £1.192bn

3) Severn Trent

Ownership: publicly listed on the London stock exchange

Total directors’ pay: £4.3m

Highest paid director: £2.4m, Liv Garfield, CEO

Total dividends 2010-19: £2.009bn

4) Southern Water

Ownership: privately owned, through a series of holding companies, by Greensands Holdings

Total directors’ pay: £2.2m

Highest paid director: £1.17m, Ian McAulay, CEO

Total dividends 2010-19: £882m

5) South West Water

Ownership: Pennon Group, a British plc publicly listed on the London Stock Exchange

Total directors’ pay: £2.6m

Highest paid director: £968,000, Chris Loughlin, group CEO

Total dividends 2010-19: £1.135bn

6) Thames Water

Ownership: consortium of institutional investors including funds from China and Abu Dhabi

Total directors’ pay: £3.5m

Highest paid director: £985,000, Brandon Rennet, CFO and executive director

Total dividends 2010-19: £1.823bn

7) United Utilities

Ownership: a British plc listed on the London Stock Exchange

Total directors’ pay: £6.2m

Highest paid director: £2.3m, Steve Mogford, CEO

Total dividends 2010-19: £2.553bn

8) Wessex Water

Ownership: YTL Corp, a Malaysian infrastructure group

Total directors’ pay: £3.6m

Highest paid director: £921,000, Colin Skellett, group CEO

Total dividends 2010-19: £1.067bn

9) Yorkshire Water

Ownership: Kelda Holdings, through a series of holding companies; 33% by Singapore government-owned sovereign wealth funds

Total directors’ pay: £2.9m

Highest paid director: £1.3m, Richard Flint, CEO

Total dividends 2010-19: £1.236bn

Photograph: Roger Bamber/www.alamy.com

Anglian Water: “With regard to dividend payments, it would be incorrect to say that borrowing is used to pay dividends. Financing though debt is the most cost-effective and legitimate way to fund new infrastructure. Customers benefit, bills are cheaper. This is why we do it.

“To be able to continually maintain and improve our critical infrastructure, reduce leakage and meet the needs of a fast-growing, prosperous region, we rely on generating cost-effective funding from a variety of sources.

“Over the past 20 years, customers have paid for just half of the investment that has been made in new infrastructure. The rest has come from our debt investors. By borrowing money and using the right amount of debt, we are able to keep customers’ bills down. This year customer bills reduced by 6% after inflation, roughly £26 per year.

“Last year, we invested about £1bn in the region and in infrastructure, and it is worth noting that our entire capital programme is financed by green bonds, reflecting our cost-effective, low-carbon and sustainable approach to construction.”

United Utilities: “Over the past 18 years, United Utilities has invested £1.2bn improving our overflow discharges to reduce the incidence, volume and impact of spills. After obtaining permits from the Environment Agency for 606 temporary-deemed consents, we have carried out further investment to stop some of them discharging altogether.

“We now have a greater understanding of the system than at any point in history, thanks to a successful project, completed in March, to install flow monitors on more than 90% of our overflows. This vast amount of data is being analysed in order to inform our investment programmes and we are actively exploring innovative solutions to help us do this work faster.”

Wessex Water: “In an ideal world there would not be a combined sewerage system. But many sewers were laid at a time when only one drain served a property – carrying both rainwater and sewage.

“To separate the flows into two systems is not possible without causing massive disruption to motorists as thousands of kilometres of road would have to be dug up, which would cost many billions of pounds and resulting in a significant increase in bills.

“Since 2000, we have invested £181m to upgrade more than 582 combined sewer overflows (CSOs) and there are plans to improve more over the next five years, spending a further £26m on CSO investigations and improvements, in line with the storm overflow assessment framework.”

Severn Trent: “CSOs are central to the design of sewer systems as they also play an important role in protecting properties from flooding, and the discharges they make are permitted and regulated by the Environment Agency so as not to have a detrimental impact on rivers.

“Since privatisation, Severn Trent has invested hundreds of millions of pounds in upgrading and maintaining our CSOs to achieve stringent river water quality standards set by UK and European legislation.

“Over the past five years we have installed monitoring at more than 80% of our CSOs and have completed detailed investigations of 32 river reaches within our region to identify further sites for improvement.”

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How does England’s sewerage system work?

How does England’s sewerage system work?

When the sewer system is operating normally, sewage leaves homes and businesses and is treated at a treatment works. Only when it has been treated is wastewater released to the environment, either out to sea through long outfalls or coastal discharges, or into rivers.

The vast majority of England’s sewer network is a combined system, which dates back to Victorian engineering, and is designed to collect the contents of people’s toilets and surface rainwater then transfer them together to treatment plants.

After extreme rainfall, the treatment works cannot cope with the volume of water and untreated sewage. Human excrement, condoms, sanitary towels and toilet paper are released untreated into rivers through combined sewer overflow pipes – just as it was in 19th-century London.

These pipes are supposed to be a safety valve to release pressure in the system and used only when an exceptionally large amount of water enters the system.

Photograph: FLPA/Rex Features

Southern Water said: “Protecting rivers is a key part of Southern Water’s mission. CSO releases are made to protect homes and businesses from internal and external flooding. These releases occur because in many areas surface drains are connected into our sewer system – which is how they were constructed for many years.

“In heavy rain, such as experienced this winter when more than 2bn litres of water fell on Hampshire in the first two months of the year alone, no wastewater treatment work can cope – they were not designed to handle storm water.

“Many of our wastewater treatment works have storm tanks as buffers, and only when these are full of the highly dilute mixture of rain and wastewater are releases permitted by the Environment Agency.

“The company has led the industry in storm-spill event and duration monitoring, meaning that our self-reporting of storm releases far outstrips the industry average.”

Northumbrian Water and Yorkshire Water did not respond to requests for a comment.

South West Water said it was content for the industry body Water UK to respond on behalf of the sector. A spokesperson for Water UK said: “The water industry is committed to the very highest environmental standards … Although there is currently no simple and effective alternative to overflows, there are some innovative solutions being used, such as sustainable drainage systems, which are natural features that help keep rainwater out of the sewer. In new housing developments, these can help to take some of the pressure off the sewer network.

“There’s also action we can all take in our day-to-day lives to help safeguard our rivers and waterways, such as helping to prevent blockages or fatbergs clogging up sewers – these are among the biggest causes of unauthorised overflow discharges into the environment.

“By not flushing products such as wet wipes down the down the toilet or pouring fats, oils and grease down the sink, we can all help keep our sewers clear and minimise the wastewater entering our natural environment.”

This post has originally been featured in Guardian.