A Reckoning for Water: Inside the Landmark Commission Report on Privatisation, Pollution and the Public Interest

The scandal at the heart of England’s water system has finally broken into the mainstream. A new Commission report lays bare the staggering cost of decades of regulatory failure, mismanagement and unchecked profiteering.

When the Independent Water Commission released its long-awaited final report in July 2025, few anticipated just how damning its findings would be. Years of growing public anger over sewage spills, creaking infrastructure and spiralling bills have now been vindicated in print. The report’s central claim is as clear as it is incendiary: over £85 billion has been extracted from England’s water system by shareholders and affiliated parties since privatisation in 1989.

That figure alone demands attention. But the report is not merely a retrospective. It serves both as a forensic autopsy of a failed experiment in private utility ownership and as a call to arms for what must come next.

A System in Decay

Since the water industry was privatised under Margaret Thatcher’s government, promises were made that private capital would bring efficiency, investment and innovation. The reality, according to the Commission, has been anything but. Leakage targets have been repeatedly missed. More than 400,000 sewage spills were recorded in 2024 alone. Investment in infrastructure has flatlined, even as bills increased and executive bonuses soared.

Perhaps most damningly, the report highlights how companies have prioritised financial engineering over any meaningful commitment to infrastructure. Complex debt structures, opaque holding companies and offshore financial arrangements have enabled a quiet siphoning of public wealth into private hands.

As The Guardian reported on 24 July, Thames Water, once held up as a flagship utility, has become emblematic of the crisis. It is now burdened with billions in debt and facing a potential public bailout, despite years of profit distribution to its former owners.

Regulatory Failure

The Commission pulls no punches in its assessment of the regulators. Ofwat, Defra and the Environment Agency are all found to have failed in their duties. Ofwat in particular is accused of prioritising financial resilience over environmental outcomes, effectively giving approval to dividend payments while companies polluted rivers and neglected infrastructure.

A particularly scathing section notes that the regulatory architecture enabled extraction rather than protection. In other words, the system did what it was designed to do. However, what it was designed to do was never in the public interest.

The government, for its part, is not spared criticism. Successive ministers from both major parties are named for their role in decades of neglect, wilful inaction, and refusal to challenge powerful corporate actors.

Public Outrage

Recent months have seen growing street protests, petitions and social media campaigns. River swimmers, anglers, environmentalists and householders have found common cause in their outrage. The phrase 'sewage in our rivers, profits offshore' has become a slogan of the movement.

Public opinion appears to be shifting decisively. A YouGov poll conducted after the report’s release found that 72 percent of respondents support re-nationalising the water industry in some form. Even traditionally pro-privatisation voices in the press have begun to question whether the current model is sustainable.

High-profile campaigners such as Feargal Sharkey and George Monbiot have welcomed the report as a moment of reckoning, while environmental NGOs including the Rivers Trust and Surfers Against Sewage have called for a root-and-branch overhaul.

What the Commission Recommends

The report does not formally advocate for full re-nationalisation, but it lays out three major options for reform:

1. Tightened regulation with profit caps, and a requirement for all surplus to be reinvested.

2. Public-benefit corporations, where ownership is transferred to not-for-profit trusts or regional bodies.

3. Full public ownership, where assets are gradually bought back or transferred during insolvency events.

Whichever path is chosen, the Commission insists that transparency, accountability and ecological integrity must be placed at the core of the system. It also calls for a new Water Resilience Act, modelled on the Climate Change Act, to set long-term targets for river health, drought resilience and infrastructure renewal.

Can Change Happen?

Sceptics argue that real change will require more than a report. Political will, legislative clarity and public pressure will all be needed in abundance. The water companies, for their part, have responded defensively. Water UK, the industry’s trade body, said it acknowledges the public concern but warned against rash structural changes that could risk future investment.

Yet the sense of inevitability is growing. Labour, widely tipped to win the next general election, has already pledged to end dividend payments where environmental failures persist. The Green Party has called for immediate public ownership. Even some Conservative MPs have privately admitted that the status quo cannot hold.

The Real Cost

The £85 billion figure is more than just a financial headline. It represents untreated sewage in bathing waters, depleted aquifers, flood-prone communities and households facing rising bills without meaningful improvements. It is a measure not only of economic extraction but also of environmental and social degradation.

As The Independent noted in its analysis, the Commission’s report frames this transfer of wealth as a historic injustice. This is seen as a redirection of public value into private reward, with long-term consequences for ecosystems and equity alike.

Where Next?

There is no single solution to the water crisis in England. What is clear, however, is that the status quo is no longer tenable. The Commission’s report may prove to be the starting gun for a new era. In this vision, rivers, coasts and communities are valued more than shareholder returns.

For now, the public waits to see whether politicians will match words with action. The reckoning has begun. There is no turning back the tide.