We’re told, time and time again, that privatisation leads to efficiency. Competition, innovation, value for money, the usual buzzwords. Yet here we are in 2025, with Thames Water, the company responsible for supplying a quarter of the UK’s population, on the brink of collapse, and the government quietly preparing for nationalisation.
So much for efficiency. As the BBC reports, the Environment Secretary, Steve Reed, confirmed this week that contingency plans are being drawn up in case the government has to take control. Thames Water, for its part, insists it’s “business as usual”. Which is exactly the problem.
Because business as usual means leaky pipes, raw sewage pumped into rivers, and a company so riddled with debt it’s practically held together with gaffer tape and PR statements.
The reason we should be talking about this is simple, Thames Water is not an isolated case of corporate mismanagement, it’s the predictable result of a system that rewards short-term profit over long-term responsibility. It is the logical outcome of turning public infrastructure into private equity portfolios.
Earlier this month, the BBC also reported that US investment firm KKR had pulled out of a £4bn deal to help prop up the company. Why? Because the political and regulatory risks were apparently too great.
It’s almost laughable, almost, to hear executives now pleading for leniency from Ofwat, the industry regulator. As if environmental fines and oversight are just inconveniences getting in the way of profit. When CEO-level bonuses were being paid out and dividends flown offshore, where was this caution? Where was the talk of risk then?
Even if Thames Water collapses, the taps will keep running. The workers will still turn up. The sewage will still get treated (we hope). Because water, it turns out, is too essential to fail.
But when something is too essential to fail, should it ever have been handed to private investors in the first place?
This is where the conversation needs to go. Not just how we rescue Thames Water, though that’s urgent, but what it says about the entire model. Water companies have handed out billions to shareholders over the years while infrastructure has visibly rotted. When they finally come begging, it’s the public expected to clean up the mess. We’ve seen it before. Rail, energy, the post. The script rarely changes.
Nationalisation may be necessary, but it must not become another temporary fix before the same broken system is rebooted. This is the moment to admit that private ownership of public essentials isn’t working. Not when it’s this extractive. Not when the profits are private and the risks are national.