Drought threat puts focus on England's chronic water leaks

LONDON (BLOOMBERG, REUTERS) - With England baking under an extreme heat warning, government officials and water companies meet on Friday (Aug 12) to try to assess what's shaping up to be the worst drought since 1976.

The British government said Friday parts of southern, central and eastern England had officially moved into drought status after a prolonged period of hot and dry weather.

“All water companies have reassured us that essential supplies are still safe,” Water Minister Steve Double said in a statement. “We are better prepared than ever before for periods of dry weather, but we will continue to closely monitor the situation, including impacts on farmers and the environment, and take further action as needed.”

The official announcement of drought status is a step higher than the previous "prolonged dry weather" across most of England.

Yorkshire Water became the latest utility to announce a hosepipe ban, starting on Aug 26. Three other water companies have already announced or implemented bans, which prevent people from watering their gardens.

The Environment Agency has four stages as it seeks to categorise the severity of dry weather. After prolonged dry weather and drought, there is "severe drought" and then "recovering from drought". Moving up a notch can lead water companies to impose more restrictions on households and businesses.

England - renowned for drizzly weather - suffered its driest July since 1935, according to the Met Office, and is facing up to a new reality of heat waves and pressure on the water supply.

The stark reality of not having enough water is raising questions about the amount of water wasted by companies through leaks and if more can be done to prevent that and soon.

Since the National Drought Group last met, on July 26, attention has increasingly turned to the quantity of water that leaks from the system - and the record of privatised water companies that run each region.

Liz Truss, the front-runner in the race to become the next Conservative leader and prime minister, said the government "should be tougher on water companies" and that not enough has been done to fix "leaky pipes which have been there for years", according to newspaper reports.

Her rival in the leadership race, Rishi Sunak, said on Thursday night that "nothing is off the table" when it comes to forcing water companies to address leaks. The utilities "can and must step up", he said according to a hustings event run by The Telegraph newspaper.

Official drought status will not necessarily trigger new actions but water companies have pre-agreed drought plans which they can enact.

Thames Water Ltd. revealed on Tuesday that it will impose a hosepipe ban on Londoners in the coming weeks. A ban is due to come into effect in Kent and Sussex on Saturday, an area served by South East Water Ltd., while Hampshire and the Isle of Wight are already subject to restrictions by Southern Water Ltd., which prevent people from watering gardens, cleaning cars or filling swimming pools.

South West Water, covering the holiday hot spots of Devon and Cornwall, said it's close to taking the step of restricting supplies.

Restrictions could even extend to businesses if rain levels remain low in the months ahead. "We don't know when the drought is going to end," Cathryn Ross, strategy and regulatory affairs director at Thames Water said in an interview with Bloomberg radio. Ross said that while there are no current plans to go beyond the hosepipe ban, the company could be forced to act, "with a heavy heart", if the problem worsens.

Her warning came just days after a large 36 inch (91cm) pipe burst in north London, flooding roads and cutting off water supplies to thousands of homes and businesses. Water companies risk stoking more public anger with restrictions on customers while billions of litres leak out of the system that they are expected to maintain.

The extent of water leaks in England is considerable. The Green Party claims three billion litres are wasted every day, while a recent report in the London-based Times newspaper put the number at 2.4 billion litres.

Thames Water said on its website that it leaks 24 per cent of the water it supplies.

Ofwat, the water and sewage industry regulator in England and Wales, said towards the end of last month that three-quarters of water companies are meeting targets to reduce leaks, but added "there is more that can be done".

Thames Water has cut leaks by over 10 per cent in the last two years, Ofwat said, but Southern Water and South East Water were further behind on 5 per cent and 3.3 per cent respectively.

Executive pay levels in the industry have fallen under the spotlight, given the hosepipe bans and criticism of the companies' performances.

Thames Water Chief Executive Sarah Bentley was paid over £2 million (S$3.3 million) in 2022, up 66 per cent from £1.2 million a year earlier. The company said this is partly due to extra compensation for money owed at her previous job.

Southern Water Chief Executive Ian McAulay was awarded £1.4 million for 2021-22, up 30 per cent from a year earlier.