Urgent Action Needed on Water Infrastructure Crisis

A recent report by the National Audit Office (NAO) has laid bare the scale of the water sector crisis in England — from deteriorating infrastructure and rising pollution to financially unstable water companies and insufficient regulatory oversight. These failures present serious and growing risks to public health, the environment, and future water supply, particularly in the already water-stressed South East.

📉 Key Findings from the NAO Report:

• Aging Infrastructure: At the current replacement rate of 0.14% per year, it would take 700 years to renew the entire water network.
• Investment Shortfall: An estimated £290 billion is needed over the next 25 years to modernise water infrastructure and meet environmental goals.
• Water Supply Risks: England is facing a projected shortfall of 5 billion litres of water per day by 2050. The South East is expected to experience severe water stress as early as 2030.
• Financial Instability: Three major water companies are in “cash lock-up” due to failing credit ratings. Ofwat has flagged concerns about the financial resilience of 10 of the 16 largest providers.
• Regulatory Gaps: No regulator currently has the responsibility to routinely inspect the wastewater network — a critical failing given the rise in pollution and declining water quality.
• Rising Bills: Ofwat projects household water bills will rise by an average of £31 per year (before inflation) over the next five years.

🔍 A Failure of Conservative Government Responsibility

The NAO report makes it clear: this crisis is not new. It has been building over the last decade, and the failure to act falls squarely on the previous Conservative government. Successive Conservative-led administrations failed to provide adequate legislation or equip regulators with the powers needed to enforce standards, ensure sustainable investment, or prevent environmental harm.

Instead, water companies were allowed to prioritise shareholder dividends and debt-financing strategies over critical infrastructure upgrades. Regulatory bodies like Ofwat and the Environment Agency were not empowered — or in some cases, not willing — to challenge these practices. As a result, England's water system has become less resilient, less transparent, and less fit for the challenges of climate change and population growth.

💸 The Situation at Thames Water

Thames Water — the UK’s largest water company supplying the majority of the borough — is now emblematic of the sector’s fragility. With around £20 billion in debt, it entered a financial crisis in early 2025, seeking an emergency £3 billion funding injection to avoid collapse. The company’s position is symptomatic of wider regulatory neglect and short-termism in the sector.

🌍 Waverley Lib Dems: A Local Response with Action and Partnerships

While Westminster has failed to act, Waverley Liberal Democrats are already working with local organisations to help protect our rivers, hold polluters to account, and build resilience into local planning.

Local Liberal Democrat Councillors have partnered with Water Rangers and the Surrey Wildlife Trust, providing funding for water testing kits to enable community-led monitoring of local waterways. These grassroots efforts are being fed directly into the Water Cycle Study for the new Waverley Local Plan — helping ensure that future development respects environmental limits and water quality standards. By empowering citizen science and using real data to inform planning, Waverley is setting an example of what proactive, environmentally responsible local government looks like.

🛠️ What Needs to Happen Next

The Waverley Liberal Democrats are calling for urgent reform to restore public confidence and protect the environment. We demand:

1. Stronger Regulation: Equip regulators with the power and responsibility to inspect wastewater networks, enforce compliance, and stop pollution.
2. Sustainable Investment: Develop a national plan for the estimated £290bn infrastructure need — ensuring the cost burden is fairly shared and environmentally responsible.
3. Environmental Action: Tackle pollution incidents, support river restoration, and protect the ecological health of water bodies — currently impacted by the water sector in 44% of cases.
4. Fairness for Consumers: Ensure water companies are held to account for service delivery before bills rise. Public trust must be earned, not assumed.

This crisis is the result of political inaction. The Liberal Democrats are committed to reversing that neglect — pushing for robust, transparent, and sustainable management of our most precious resource: water.

🔗 Read the full NAO report here

📢 Join Us in Building a Better Waverley

We’re proud of what we’ve achieved so far—but there’s more to do. Help us continue to deliver for local people and protect the future of our communities.