Water company dividends: shareholders pocket millions as customers face leaks, sewage spills and hosepipe bans

As water companies face fresh criticism on performance and big pay outs campaigners call for the sector to be nationalised.

Shareholders at some of England’s biggest water companies took home over £500 million worth of dividends last year, despite leaking pipes, sewage discharges and hosepipe bans affecting large parts of the country.

Nine water and sewage companies –  including Thames, United Utilities and Yorkshire Water – paid out over £531 million pounds to shareholders in 2021, according to research published by the University of Greenwich. Northumbrian Water paid out more than any other firm with £123 million in total.

In total shareholders have received £18.9 billion in dividends since 2010 – an annual average of £1.6 billion. This does not include the companies that just supply drinking water, without handling sewage.

The University analysed the company’s annual financial reports to arrive at the figures, with researchers concluding that several companies were trying to conceal the true sums paid out to private shareholders. They also said they expect the current total of £0.5 billion for 2021 to climb “significantly higher” when final reports are published.

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Anglian Water paid out the highest annual average with £557 million per year, followed by United Utilities with £284 million and Severn Trent with £223 million. You can use the interactive chart below to see how much your local water company paid out in dividends to shareholders.

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The figures come as much of England falls under new hosepipe restrictions to cope with limited water supplies after a summer of record-breaking temperatures. Thames Water is the latest company to enforce the rules.

Despite the restrictions water companies are losing millions of litres every day because of leaks within their pipe network. Last year (2020/21) over a trillion litres of water were lost, according to a NationalWorld analysis – the equivalent of almost half a million Olympic sized swimming pools.

Dividend payments have “significantly reduced” the amount of money available to invest in water and sewage infrastructure, the Greenwich researchers said, adding that despite the promise that privatisation would mean shareholders would make the investments needed, “the reverse has happened”.

You can find out how much your water company is losing to leaks and burst pipes every year here.

‘Nationalise not privatise’

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England’s water system is privately owned which allows shareholders to make such big sums.

The University of Greenwich research team said England is one of the few countries in the world that has a privatised water and sanitation system.

The team concluded that the Government should find a way of bringing the water and sewage systems back into public ownership to achieve greater scrutiny of services, like Scottish Water. The analysis found Scottish Water had a proven track record of higher investment and lower costs to consumers.

“No other country in the world has adopted the English system of private companies owning and running regional water and sanitation systems,” the University of Greenwich reported.

“The overwhelming majority of the world – including the USA – runs water and sanitation services through the public sector.

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“Only a small minority of cities – less than 10% - subcontract private companies to run water services, always on a fixed-term contract, and under the scrutiny of an elected public authority - and the trend is away from such outsourcing. Sewerage is very rarely outsourced to private companies.”

‘Water fat cats trouser millions’

Earlier this year Keir Starmer ditched plans to nationalise the water and energy sector.

But unions argue that nationalising is the best way to tackle high payouts and poor performance.

Andy Prendergast, GMB national secretary, said: “It’s a disgrace that customers face a £1,000 fine [for breaking hosepipe bans] as private water fat cats trouser millions, all the while failing to sufficiently tackle leakage and refusing to invest in the workforce.

“Privatising water has been a disastrous failed experiment, it’s time to bring this essential natural resource back into public hands.”