‘People’s commission’ to examine future of water industry in England and Wales

A “people’s commission” on the future of the water industry will travel across England and Wales taking evidence from the public and environmental campaign groups fighting sewage pollution.

Academics and environmental campaigners who were central to exposing the routine dumping of raw sewage into rivers by water companies have set up the inquiry to rival the government-established independent commission.

Members include the former Undertones frontman and campaigner Feargal Sharkey, Becky Malby, who was responsible for a stretch of the River Wharfe in Ilkley becoming the first to be given bathing water status, Kate Bayliss, an academic who has investigated how private equity has taken over large parts of English water firms, and Ewan McGaughey, a professor of law at King’s College London.

The people’s commission will start taking evidence on 27 March. Malby said it had been set up because the independent commission, chaired by Sir Jon Cunliffe, a former deputy governor of the Bank of England, was too limited in its scope and not willing to consider alternative forms of ownership from the privatised model.

Malby said: “The people’s commission fills the gap because we are going to address the problems that really matter to the public: the level of pollution in our rivers and seas, the shocking level of debt that water companies have racked up that we are having to pay excruciating interest on, the massive increase in bills with no guarantees that we are going to have clean water.”

Malby said participation in the Cunliffe commission was limited to stakeholders in the water sector and there was little scope for involvement from the public.

On Thursday Cunliffe called for evidence from investors and environmental organisations but made clear he would not be looking at renationalisation of the industry during his investigation, which will report this summer.

He said: “My job is to make the current system work better; the government has made clear they have ruled out nationalisation.”

In a speech in Manchester, Cunliffe said he did not think the privatised ownership of the industry was the problem. His remit will focus mostly on regulatory reform and ensuring financial resilience.

“The problems we see today have not emerged overnight. Nor, I believe, are they the inevitable consequence of a privatise regulated company model,” he said. “Rather, they have developed over time and due to factors including poor decisions and poor performance by companies, regulatory gaps, policy instability and a history of ad-hoc changes that have left an increasingly complex system that is no longer working well for anyone.”

Some water companies have said they will raise dividends to shareholders as they increase customer bills to pay for record £100bn investment in the sector over the next five years. Bills will rise by an average of £123 this year alone.

The industry was responsible for record sewage pollution last year. This month the high court approved a £3bn bailout for Thames Water, which has £17bn of debt, to stave off the company’s collapse. But customers will have to pay for the emergency loan – which comes with a 9.75% interest rate – in further bill increases, the high court heard.

Bayliss, of the department of economics at Soas, has worked extensively on privatisation and contributed to Guardian research which revealed that in 2022 more than 70% of English water companies were owned by foreign investment firms, private equity, pension funds and businesses lodged in tax havens.

She said: “Our water system is not working. Our biggest utility is in financial crisis while raw sewage spilling into our rivers and seas has become the new normal. We need to fully understand what exactly is driving these failings, and why. From here we can devise pragmatic solutions, learning from experience in the UK and abroad, to build a water system in the interests of society and the environment.”

The people’s commission will look at international examples, alternative models of ownership, innovation in water services and securing value for the public while protecting rivers, lakes and seas.