Martin Franklin reviews Murky water: Challenging an unsustainable system, by Luca Calafati, Julie Froud, Colin Haslam, Sukhdev Johal and Karel Williams, published by Manchester University Press.

Our water system is a stinking mess.  The authors of Murky Water explore its depths and outline solutions.

Our dysfunctional ‘water industry’ is a legacy of Thatcher-era privatisation. It now stands as a symbol of a zombified neoliberal policy framework kept alive by a powerful entrenched financial sector, aggressive lobbying, and a revolving door between political and corporate elites.

News coverage routinely highlights the huge salaries and bonuses paid to water company executives, even as the system creaks and leaves some communities without reliable water for months. Raw sewage continues to be dumped into rivers, lakes and coastlines, destroying ecosystems. Meanwhile, bills have risen on average by 56% in the past five years and are set to climb significantly into the future.

Andy Burnham’s rebooted Labour government is doing all it can to avoid taking the spectacularly failing Thames Water into public control. The 2025 Cunliffe Review commissioned to examine the causes of our collapsing water system was explicitly limited to “reforms within the privatised regulated model,” ruling out consideration of public ownership. Who remembers that Labour once took pride in nationalising essential utilities?

Polling consistently shows that more than 80% of the public  favour bringing water into public ownership. The gap between public wishes and public policy is stark. It reflects a political class deeply entangled in vested interests and institutional constraints that narrow the range of policy options even when the existing model is visibly failing.

The authors of Murky Water argue that the media focus on greedy CEOs and tonnages of sewage discharged creates a narrative that fails to address the bigger environmental and climate problems we face. The political responses to such stories are ineffective measures such as fines without deterrent impact and toothless limits on executive bonuses. 

Since privatisation, water companies have been acquired by often foreign owned asset management companies.  These companies focus on financial engineering to maximise shareholders returns; this has involved asset stripping and loading companies with debt to pay dividends.  Thames Water is the most extreme example, currently in £19bn of debt. 

This modus operandi means that water companies inevitably fail to invest in maintenance and new infrastructure and instead employ the cheapest possible patch and repair strategy to maintain a leaky crumbling and polluting water network.  The companies have encouraged the view that these problems relate to the Victorian age of the system; in truth, more than 70% of the system was built after 1945. 

The TV series Dirty Business dramatized the scandal of sewage discharges and exposed the irresponsibility of water companies and the abject failure of the regulators and watchdogs charged with representing the public interest.  

Demand for water is rising as supply is diminishing.  A recent report warned that water shortages threaten to block the building of over one million new homes in England.  At the same time the government is pushing through plans for thirsty data centres in areas of the country suffering from water stress.  The government’s rhetoric about AI driven growth and building out of the housing crisis ignores such clearly discernible and tightening environmental constraints.

This summer (2026) has seen an almost continuous heatwave for much of the UK; this is predicted to be the new normal for our climate. Hosepipe bans are in force though it is estimated that fixing leaking pipes would save substantially more water.   

We face a future of droughts in the summer and more flooding in the winter months with conditions varying regionally.  It is clear that we need a programme to develop a large-scale system of water storage and distribution.  But such planning for the future is absent: not only have companies failed to build and expand water storage – they have been selling reservoirs off to developers. 

Murky Water applies a Foundational Economy lens to understand the current state of our water system and argues for four key reforms: a progressive charging system; renationalisation; coordination in and across catchment areas to balance needs and facilitate nature-based solutions; and national planning for coordination and distribution across regions.

Renationalisation of water is necessary to end the financial engineering and extraction built into the privatised model. But nationalisation on its own will not solve the underlying problem of the high and ongoing costs of maintaining the vast network of pipes, treatment works and other physical infrastructure that now requires major renewal and expansion.

These investment needs are substantial and long term, and they cannot be met through revenues from water bills or raised in the market. The financial demands of the system exceed what a commercial model can sustain. Ultimately, water cannot operate effectively and for public benefit when treated as a business in a market environment.

So higher charges and subsidies are necessary; but to relieve the heavier cost burden falling on poorer households, as it currently does, charging should shift from consumption to a tariff based on household income.

Regions are experiencing varying seasonal effects of climate heating. At the local level, planning and controls will be necessary to manage potentially competing interests, to protect nature and ensure consideration of nature-based solutions such as river management and flood plains. Local management would also involve democratic input. The current drive for more data centres in water stressed areas make this last element particularly relevant.

National planning is also needed to coordinate interregional transfers to relieve increasing water stress in the south and east of England and elsewhere. Some areas such as the west are becoming wetter, increasing flood risk, while the south is becoming drier, raising the risk of drought. Water management in the context of climate heating calls for an inclusive and extended integration of different social needs and interests; farmers, developers, householders and others face distinct issues around water supply and environmental risk.

Current arrangements and institutions are inadequate, and serious thought needs to be given to how decisions would be made and exercised.  In this country there has been nothing since Bazalgette’s Metropolitan Board of Works to provide a model for taking this forward.  A big state ‘missions’ approach advocated by Mariana Mazzucato may be appropriate for planning and building infrastructure at the necessary scale.  

Sadly, the authors of Murky Water see no sign of the government abandoning market-based solutions to our water crisis.  The role of Ofwat is primarily about economic regulation, set on maintaining the attractiveness of water to investors. It has never been environmentally focused. The government adheres to this approach, excluding alternatives as the policy agenda continues to be set by financial elites.

So, the future is set for ‘projectification’, a fragmented programme of privately commissioned and financed infrastructure projects to build reservoirs, etc. The result will be piecemeal and short term rather than the integrated system we desperately need.  It will, however, facilitate continued financial engineering.  

The mess created by privatisation is now widespread across our public services, and the Labour government’s unwillingness to make any significant change is exemplified by the case of Thames Water. The fact that the company’s creditors felt able — if not entitled — to suggest exempting Thames Water from environmental responsibilities shows their confidence that the government will allow them great latitude. At the same time, the company has increased executive pay and handed out millions in management-retention bonuses and special payouts, despite its acute financial crisis and heavy debt burden.

It should be understood that managers and CEOs of the water companies are not being handsomely rewarded for running a water system, their remuneration is related to ensuring financial returns to shareholders.  CEOs are there to take some flak for leaks and sewage pollution and to deflect and delay significant change for as long as possible.

Water is an essential public resource that is being badly mismanaged, with gloomy consequences for our future. Murky Water provides a thorough analysis of this situation. 

The authors conclude that pressure from civil society is the only way real change will come. They highlight European movements in the 1990s that successfully reversed the commodification of water services, showing that citizen-led reforms are possible.

There is a substantial but diverse water-focused movement in the UK, which is increasingly linking with the broader environmental movement. But the authors argue that greater effectiveness will require a more widespread radicalism, united by the ideal of the commons, before it can disrupt the current configuration of power that continues to impose an extractive system on us.

Martin Franklin is a member of the Islington Environment Forum Steering Group.