Expose reveals how water privatisation led to contamination, deaths and downturn
For Sarah Lambert, the sea off Exmouth’s town beach was a source of freedom and vital exercise. A wheelchair user, her regular 40-minute swims were a cornerstone of her wellbeing. But in August 2024, that same water delivered a life-threatening infection, hospitalising her with sepsis caused by E coli and Citrobacter bacteria after a catastrophic sewage pipe burst. “I was seriously ill,” said Lambert, 47, who required a week in hospital followed by ten days of intravenous antibiotics at home. “The sea is just on my doorstep, but I don’t swim there any more.”
Her case is a stark personal illustration of a national environmental and public health crisis, a reality thrust back into public consciousness by the Channel 4 docudrama Dirty Business. The film wove together the human tragedy of eight-year-old Heather Preen, who died from E coli O157 poisoning in 1999 after paddling near Exmouth, with three decades of systemic failure in England’s privatised water industry.
A System Under Strain
The industry’s problems are rooted in its 1989 privatisation under Margaret Thatcher, which made England one of only two countries globally, alongside Chile, where water is a for-profit private resource. Promises of higher investment have given way to a legacy of underfunded infrastructure, now buckling under increased rainfall from climate breakdown and pressure from new housing. A secret 2002 report warned ministers that privatisation would allow private equity to load companies with debt and that the economic regulator, Ofwat, would inevitably lose regulatory control—a prediction campaigners say has come true.
The financial outcomes are stark. Since Heather Preen’s death, the industry has accumulated £73 billion in debt while paying out £88.4 billion in dividends. The infrastructure is failing visibly: in 2023, water companies in England and Wales were responsible for 3.6 million hours of sewage spills. Data from Thames Water showed raw sewage discharges in rivers rose 50% in 2024. At a local level, Andy Tyerman of Exmouth’s anti-sewage campaign Escape notes that South West Water has consistently underperformed, never achieving more than a two-star rating and exceeding its own spill targets.
Lambert’s illness followed a burst pipe at Exmouth’s Maer Lane treatment works. A spokesperson for South West Water said the company was “sorry to hear that someone has been unwell” and pointed to planned improvements for the site, stating, “The early stages are going well.” Lambert is now part of a group environmental legal claim against the company.
Regulation in Crisis
Enforcement has repeatedly failed to match the scale of offending. English water companies have accumulated nearly 1,200 criminal convictions for pollution; a report by 38 Degrees identified over 1,100 convictions against ten firms, totalling over £171 million in fines. Yet not one chief executive has faced criminal charges.
Major prosecutions have resulted in record fines but no individual accountability. In July 2021, Southern Water was fined a record £90 million for deliberately dumping billions of litres of raw sewage into protected seas between 2010 and 2015, with prosecutors citing “long-term corporate knowledge.” More recently, in May 2025, Thames Water was fined £123 million by Ofwat, with £104.5 million for environmental failures and £18.2 million for breaking dividend rules.
Within the regulatory bodies themselves, confidence is low. The UN Special Rapporteur on the human right to clean water, Prof Pedro Arrojo-Agudo, has singled out Ofwat for criticism, calling it “complacent” and lacking transparency. From inside the Environment Agency, whistleblower and former environment officer Robert Forrester believes the structure is corrupted. The Agency’s water regulation budget for 2025-26 is £189 million, with £149 million coming from permit fees paid by the very companies it regulates. “The regulator cannot regulate because it has so many vested interests in the businesses it is regulating,” Forrester said. The Environment Agency outlines its legal powers and duties in regulating the industry, but Forrester’s allegations point to a fundamental conflict.
Political Crossroads and Private Equity
The political response has evolved but stopped short of the renationalisation that a 2024 poll indicated is supported by 82% of the public. In 2018, Conservative Environment Secretary Michael Gove accused firms of “financial engineering,” noting 95% of profits had been paid as dividends since privatisation. The Labour government elected in 2024 promised a crackdown, introducing the Water (Special Measures) Bill to ban bonuses for poor performers and impose tougher penalties. An Independent Commission chaired by former Bank of England Governor Jon Cunliffe delivered 88 recommendations in late 2024, including abolishing Ofwat, and the government’s January 2026 white paper, “A new vision for water,” outlined plans for “preventative regulation.”
Yet ministers resist public control, citing a contested cost of £90-£100 billion—a figure derived from a thinktank funded by water companies and criticised as “economically illiterate” by Labour MP Clive Lewis. This resistance persists even for the most troubled company, Thames Water, which serves 16 million customers and struggles under £20 billion of debt. It is effectively controlled by a consortium of global private equity firms and hedge funds, London & Valley Water, which has proposed a £20.5 billion rescue plan. The consortium, which details its financial plans and results, denies seeking leniency from fines but its proposal is contingent on renegotiating performance targets with Ofwat, including on pollution and leaks.
Campaigners argue alternative models exist. “Everyone thinks nationalising will be the same as it looked in the 1970s, but there are lots of modern models we can look to,” said Andy Tyerman. In Paris, the 100% municipally owned Eau de Paris reports customer satisfaction rates between 90-96%. Becky Malby of the Ilkley Clean Water campaign in West Yorkshire warned that the government’s current approach “shackles the public to failed privatised water companies with long-term increases in bills and no end in sight to broken infrastructure and pollution for profit.”
For victims like Sarah Lambert and the legacy of Heather Preen—whose death led to her parents’ separation and her father’s subsequent suicide—the call is for fundamental change. As amateur sleuths like Peter Hammond and Ash Smith, who helped uncover years of underinvestment, and campaigners across the country maintain pressure, the question remains whether political action will ever match the scale of a crisis decades in the making.
