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municipalauthorities.org | 23 Underinvestment in system infrastructure has gained the public’s attention and ire. One of the most alarming outcomes has been the dramatic increase in sewage pollution. In 2023, the United Kingdom’s Environment Agency reported 3.6 million hours of sewage spills into rivers and seas, more than double the 1.75 million hours reported in 2022. In the first quarter of 2024 alone, raw sewage has been dumped into the River Thames for over 1,900 hours. The scale of this pollution has not only caused significant environmental harm but has also become a critical issue in local elections, as public anger over the handling of water and wastewater services has grown. On top of the increase in untreated sewage releases, at least one-fifth of the total public water supply is lost to leakage each day. In England and Wales, for example, 660 million gallons of water is lost daily. As rates go up and compliance falters, the public scrutinizes the finances of the water companies. The details of the financial practices of these companies have come under intense scrutiny. Despite the environmental problems and widespread public dissatisfaction, major water companies have continued to pay out substantial dividends. For instance, in 2023-2024, three companies reported a combined profit of £710 million and announced increased dividend payouts, even as they sought approval to raise customer bills by up to 36%. Thames Water, the largest provider in the UK, is on the edge of financial collapse, straining under debt of over £15 billion. Ironically, the company’s struggles have led to emergency government discussions about placing it into a “special administrative regime” and, in essence, a return to public ownership. Investor confidence is dropping and the company’s ability to continue operating without significant public intervention has been called into question. Interesting that the cure for bad management under private ownership is public ownership. Has Pennsylvania taken note? Ireland: Irish Water’s Rocky Road The situation in Ireland, while different in some respects, has echoed many of the same themes seen in England. Irish Water, the national utility responsible for water and wastewater services, was established in 2013 as a semi-state company with a mandate to bring much-needed improvements to the country’s water infrastructure. However, its establishment has been laden with controversy, particularly regarding its financing and charges imposed on users. Initially, Irish Water planned to introduce water charges to help fund the upgrading of the country's creaky and leaky water infrastructure. However, this move was met with massive public protests and political backlash, leading to the suspension of the charges in 2016. This decision left Irish Water heavily reliant on government funding, which has been insufficient to address the scale of the necessary improvements. As a result, much of Ireland’s water infrastructure remains in a poor state, with frequent boil water notices and leakage issues plaguing the system. So, when the public balked at paying user rates to improve infrastructure, protesting the company’s alleged wastefulness, the government used “public funds,” derived from taxes to pay for basic usage, with excess usage being paid by the customer directly. In short, the move away from local water authorities to a centralized semi- private company, the results were so poor the structure had to be changed. The Broader Impact: Rising Costs and Declining Trust Both in Ireland and England, the privatization of water services has led to significant increases in water ...there are strong and undervalued countervailing considerations inherent in sales of public systems to IOUs. rates for consumers, often without corresponding improvements in service quality, infrastructure soundness, or regulatory compliance. In England, water bills have risen by approximately 40% above inflation since privatization, a burden that has fallen disproportionately on lower-income households. Similarly, in Ireland, the debate over water charges highlighted the financial pressures on ordinary citizens, many of whom are already struggling with high living costs. The consequences of these failures extend beyond immediate financial impacts. In both countries, there is growing public mistrust in the ability of private companies to manage essential public services like water. This mistrust has been exacerbated by scandals involving pollution, executive pay, and the diversion of funds away from critical infrastructure investment. The situation has reached a point where there is increasing Continued on page 51.