Water regulator giving companies a ‘licence to leak’, say MPs and charities

theguardian.com:

Ofwat, the water regulator, is not using its full powers to clamp down on sewage pollution and leaks, ministers, MPs and charities have said.

The regulator has been criticised for giving water companies a “licence to leak” for years and not curbing massive bonuses for CEOs who preside over a system of pollution and chaos.

Last week there was outcry after the chief executive of Ofwat appeared to defend water companies, arguing that they had made investments, that leaks were not due to old pipes, and that a lack of reservoir building had been due to low demand.

The recent sewage dumps and water leakage during the drought have caused many to wonder whether the regulator is fit for purpose, with issues such as water CEO pay, leaking pipes and unbuilt reservoirs under the spotlight. Concerns have been raised over whether Ofwat is working properly or whether it is too close to the water companies, and why water has not been seen as a critical political issue.

Philip Dunne, the Conservative MP for Ludlow and chair of the Commons environmental audit committee, told the Guardian that Ofwat was not using its full powers to target CEO pay. “They do have the power to sanction remuneration arrangements for directors already, and I don’t think they have done that.”

Government ministers have hinted they are frustrated that they, unlike Ofwat, are unable to force water companies to spend more on infrastructure instead of big bonuses.

Sources said they would like to see water companies spending far more on better infrastructure and far less on payouts to shareholders, but pointed out that the secretary of state does not have powers to withhold dividends from water company shareholders.

Steve Double, the Defra minister, said: “The public and