Water failures in England and Wales are a warning for Canada and the US

The water crisis in England and Wales – which has seen the countries facing widespread drought and utility companies fined for polluting rivers and seas – has been decades in the making. It has emerged as a result of underinvestment, ageing infrastructure, fragmented oversight and governance decisions that allowed financial and operational risks to accumulate outside public view. While Canada and the US have mostly avoided the privatisation approach adopted in the devolved nations of England and Wales, recent infrastructure failures indicate that some of these same governance and accountability issues are beginning to surface. The situation is more than just a warning about privatisation of water. It shows what can happen when governments defer, delay and leave tough conversations and oversight until failures are widespread. During summer 2026, a widespread drought highlighted the pressure on England’s water system. By mid-August, 71% of England by land was in drought and approximately 29 million people faced water-use restrictions. Thames Water was among the utility companies imposing water restrictions, including a hosepipe ban, which limits the use of hosepipes, sprinklers and pressure washers for non-essential activities. This ban highlighted a deeply intertwined crisis facing the utility: financial troubles and deteriorating infrastructure. Thames Water’s 2024–25 annual report recorded net senior debt (borrowed money that has repayment priority over other debts minus any cash in the bank) of £16.8 billion, with recent estimates placing the value closer to £20 billion. In May 2025, the water industry regulator Ofwat fined the company nearly £123 million for wastewater failures and breaches of dividend rules. The company has continued restructuring while addressing pollution, leakage, and infrastructure needs. While Thames Water is privately owned, privatisation alone does not explain its current crisis. The deeper issue is that the existence of a monopoly allowed the corporation to take significant financial and operational risks. But water services are too important to fail. If a utility becomes financially unstable, the consequences do not disappear, they are passed on to customers, regulators and ultimately governments. The UK government is now proposing to abolish Ofwat and create an integrated regulator. The government’s own water whitepaper acknowledges limited oversight, weak financial resilience and fragmented planning. A new institution will only produce different results with improved information, technical capacity and authority to intervene early. In Wales, a different ownership model helps separate ownership from governance. Dŵr Cymru (Welsh Water) reinforces this point. It is owned by Glas Cymru, a company without shareholders and retains surplus revenue within the business. Nevertheless, Ofwat proposed a £44.7 million enforcement package in 2026 after identifying failures in asset management and inadequate oversight. While the ownership model changes incentives, it cannot make up for weak governance and a lack of oversight. Elan valley dam in Wales. PaulJRiley/Shutterstock Warning signs in Canada Our ongoing research into Canadian municipal and regional water-utility governance shows why public ownership alone is not sufficient. Canada’s water services remain largely under public ownership. Although this provides greater public control and accountability, it does not eliminate the risk entirely. Calgary’s Bearspaw South feeder main pipe, which can carry approximately 60% of the city’s drinking water, catastrophically ruptured in June 2024. A second major failure occurred in December 2025. An independent review found that risks associated with the pipe had been recognised two decades earlier. Inspection recommendations were deferred or redirected, responsibility for escalating the risk was unclear, and the local council received limited information about operational risks. The review recommended stronger asset management, a dedicated utility department and independent expert oversight. While this ownership model differs from England and Wales, the pattern is familiar. Risks were known, action was delayed, and those providing oversight lacked sufficient awareness. Same patterns in the US Our comparison with recent US infrastructure failures points to the same governance challenge. Most Americans receive water from large publicly owned systems. In January 2026, part of the publicly operated Potomac interceptor sewer line collapsed in Maryland. The utility company DC Water estimated that approximately 243 million gallons of wastewater escaped, mostly during the first five days of the collapse. The US Department of Justice subsequently filed a Clean Water Act complaint alleging that DC Water had failed to operate and maintain the sewer adequately. The incident required emergency pumping, environmental monitoring and federal assistance. This all forms part of a larger infrastructure problem. The Environmental Protection Agency estimates that US drinking-water systems will require US$625 billion (£468 billion) over 20 years. In Canada, publicly owned water infrastructure had an estimated replacement value of US$963 billion in 2022, with US$106.5 billion rated in poor or very poor condition. Read more: England’s sewage scandal hinges on lack of water industry regulation – new docudrama reveals how profit drives pollution Across our Canadian governance research and comparison with England, Wales and the US, the recurring issue is not simply who owns a utility. Water utilities need to be open about the condition of key infrastructure, what maintenance has been delayed and whether risks are increasing. Regulators also need the expertise and authority to identify problems before they become crises. The UK’s reforms will only succeed if they change how decisions are made, not just how the system is organised. In the UK, prolonged underinvestment, limited transparency and unclear accountability can lead to critical service interruption and reduced public trust. By proactively addressing these weaknesses, Canada and the US can avoid recurring failures creating a comparable crisis.