South London 'Watergate' must lead to urgent reform

The word “Watergate” recently took on a new meaning when Streatham residents were left for days without any running water. Residents had no flushing toilets, showers or drinking water when pipes burst following freezing temperatures. A minimum of 12,000 households were affected and were asked to visit water distribution points – sometimes as far as half an hour from their homes – to pick up bottled water instead. In the days following, neighbouring areas like Tooting Broadway and Herne Hill also suffered severe, hard to manage pipe bursts.

Thames Water’s handling of the situation left residents disgusted, and has highlighted the need for an urgent investigation into the company’s operating model and ability to deliver a proper service. The company, which paid a hundred million pounds in dividends last year, moved slowly to make repairs and failed to meet a series of self-imposed deadlines. Communication was patchy and sometimes contradictory. The company failed to set up enough water distribution points, or to deliver water to members of the community who were unable to travel.


Ofwat, the regulator, recently fined Thames Water the maximum penalty for failing to meet leakage commitments. And the company has clearly ignored recommendations made at a public meeting in Lambeth in early 2017, demanding that it improve maintenance programmes and mitigate against the potential for more burst pipes.

While Thames’ woes are a current hot topic in the media, local Liberal Democrats have been pointing out the failures of the current system for many years.

George Turner, our parliamentary candidate for Vauxhall in the 2017 General Election and a prominent local campaigner on planning and infrastructure issues, co-authored a report in 2013, which set out how Thames’ then owners were taking huge sums of money out of the company via a set of murky offshore companies. He argued that this financial asset stripping was starving the company of the capital it needed to invest in replacing London’s Victorian water network. The report recommended adopting a similar model to Welsh Water, which in 2001 became a not for profit company. With all financial surpluses used for the benefit of customers, Welsh Water’s set up is designed to reduce incentives for financial engineering and promote necessary investment in the network.  

The success of Welsh Water shows that given the right foundations and incentives, water companies can deliver an excellent service and be responsive to bill payers while still being able to raise the money they need for investment without calling on taxpayers for subsidy. As Liberal Democrats this model lines up well with our values: we believe that power should sit in the hands of local people wherever possible, and that organisations delivering vital services should be accountable to users rather than to remote shareholders or government ministers.

We support Lambeth councillors’ calls for an inquiry into Thames Water’s suitability to operate the water system and believe that this should include an exploration of alternative models including the Welsh Water model or mutualisation. In the meantime, Thames Water must come to Streatham to answer the concerns of residents who endured days without water. We are calling on the council to bring company representatives to a public meeting in Streatham as soon as possible.

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