More than 70% of the industry is now owned by overseas investors, many operating opaque, debt-heavy holding structures. As a result, the sector increasingly resembles a web of financial vehicles—disbursing dividends, loading debt, and issuing executive bonuses—rather than a collection of utilities safeguarding a vital natural resource.
Pollution from storm overflows, declining water quality, and high-profile failures like the cryptosporidium outbreak in Devon have amplified public anger. This is compounded by revelations that billions in customer payments have funded interest and shareholder dividends rather than infrastructure upgrades. At Thames Water, for instance, over a quarter of its revenue reportedly goes to debt servicing. Executive bonuses continue despite regulatory penalties and company underperformance.
Such practices have eroded public trust. And yet, frontline workers—who remain dedicated to delivering essential services—are caught in the crossfire.
The Committee's recommendations call for a radical rethinking of the sector’s foundations. This includes:
The water sector’s historic reliance on debt—once seen as a tool for capital investment—has now become a liability. Some companies are operating at a loss, and the public is being asked to foot the bill for decades of mismanagement.
What’s ultimately at stake is public confidence in the stewardship of a critical natural resource. The report underscores the need for “low-risk, low-reward” financial incentives and a renewed social contract between water providers, regulators, and the public.
But is reform enough—or is it time to reconsider whether essential services should be traded in financial markets at all?
The summer 2025 report from the Independent Water Commission may hold the key to this question. But one thing is clear: without decisive action, the water sector risks drowning in its own contradictions.
