financeroom.net

Rising raw sewage spills into England’s waterways flushed out a promise of increased investment from water companies this week.

The number of monitored sewage discharges into rivers, lakes and the sea has risen from about 400 to 865 daily between 2018 and 2022, according to Environment Agency (EA) data. The scale of the crisis has stoked indignation among nature enthusiasts, wild swimmers, surfers and the fishing community.

These numbers are likely to be an underestimate. Not all of the 15,000 storm overflows in England’s sewage system are yet fitted with monitoring devices. Storm overflows are safety valves that release untreated effluent when the system comes under pressure. Monitors must be fitted in all by the end of this year. About 91 per cent are equipped at present. In 2015, this was only 10 per cent. Even those that are equipped do not always generate data.

Annual discharge numbers can also be skewed by factors such as drier weather, as was the case in 2022, according to the EA.

Water UK, a trade body, responded this week with a pledge to invest £10bn by 2030. This is over and above the £3.1bn that had already been earmarked for 2020-25. The government estimates it will take a total of £56bn to solve the sewage crisis. Others believe higher sums will be needed to make the system as a whole resilient. Barclays has put this number at £100bn by 2050.

Water UK’s pledge is, at the moment, just that. Much of the money is intended to be spent between 2025 and 2030. Investment plans for that period will not be sanctioned by the regulator Ofwat until the end of 2024.

Water companies fund investment through borrowings. It is then paid back via customer bills. Bills will have to rise 60 per cent from an average of £440 a year per household at present to support £100bn of investment by 2050, estimates Barclays analyst Dominic Nash.

Water companies are at last acknowledging the scale of the crisis. But pressure will continue to build until the effects of under-investment are cleared.