Why was England's water privatised in 1989, and what has changed since?

England's water was privatised in 1989 after years of underinvestment: the ten state-run regional water authorities had been hampered by chronic underfunding and lack of investment from central government, and the government chose to sell them. In 1989 the provision of water and wastewater services in England and Wales was transferred from the state to the private sector through the sale of the ten regional water authorities. England and Wales became the only countries in the world to have a fully privatised water and sewage disposal system.

The background: by 1980 investment in the water sector was just one-third of what it had been in 1970. The government had proposed privatisation in 1984 and 1986, but strong public feeling led to the plans being shelved before the 1987 general election. The new companies paid £7.6 billion for the authorities, while the government took on the sector's £5 billion of debts and granted a further £1.5 billion 'green dowry' of public funds. New regulators were created, including Ofwat, which sets the price regime.

What has changed is argued about. Sir Jon Cunliffe, who chaired a review reporting in July 2025, said investment and efficiency grew in the decades immediately following privatisation, that drinking water and sanitation standards are now world-leading, and that in more recent decades performance has plateaued. Critics point to costs: research by the University of Greenwich suggested consumers in England paid £2.3 billion more every year than if the companies had stayed in state ownership, and a 2017 poll indicated that 83% of the public favoured renationalisation.

Scotland and Northern Ireland stayed public, and in Wales Welsh Water has been not-for-profit since 2001.