News analysis: Drought Britain

The people of Le May Avenue, in London's Grove Park, have just been told that they cannot use hoses in their gardens this year - on pain of a £1,000 fine - because water is so scarce. But plenty of the stuff is being wasted just outside their front doors.

It wells up at the corner of this suburban street near Lewisham, and runs in a busy, little stream down a gentle slope to a drain 100 yards away.

Thames Water - which last week imposed the hosepipe ban - admits that it has known of the leak for two months.

"It's ridiculous" says James Wells, a retired milkman. "They waste all this water. If they can't care less, why should we? It's all right to pour it down the drains, but we can't use it on our lawns."

And Steve Carpenter adds: "The pipes are antiquated. But why can't we invest a little in putting them right instead of spending all that money on the Iraq war?"

There is nothing extraordinary about the leak; it is just one of hundreds gushing away all over the capital, and the country. Across the city, in Mill Hill in the north-west, for example, a three-month-old leak has created a pond 100ft long by 10ft wide, disrupting the traffic. In Greenford Avenue, Hanwell, west London, water has been streaming out for six months, carving craters in the road. And a leak in the village of Ravensden, near Bedford - local people say - has been pouring away, unchecked for a full 11 years.

Across England and Wales some 3.6 billion litres (800 million gallons) of water leaks every day; enough to fill more than half a million Olympic-size swimming pools every year. Just one water company, Thames Water, is responsible for a quarter of it.

A further 1.1 billion litres a day - more than another 150,000 swimming pools a year - is lost in Scotland. Yet from the start of next month, 12 million people in the South-east of the country - eight million of them served by Thames Water - will be prohibited from watering their gardens with sprinklers and hosepipes, in the face of the worst drought in more than a century. Bans on watering parks, playing fields and golf courses, and on filling swimming pools and on running fountains, are expected soon.

The South-east has been dry since November 2004; all but one of the intervening 16 months has had less than average rainfall. Reservoirs are half empty, groundwater is at record lows, and rivers are at levels normal for high summer rather than winter. There is a serious chance that later this year - for the first time in three decades - water will be rationed, and people will have to collect it from standpipes in the streets.

Baroness Young, the chief executive of the Environment Agency, has been warning of the crisis for more than a year. A former head of the Royal Society for the Protection of Birds - and deputy chairman of the BBC during the last years of John Birt's stormy director-generalship - she has long been harrying the water companies to take action.

"We were banging on at them last summer, but got little response," she said yesterday. "I think the companies were living in hope, because we can survive one dry year.

"But now we are into the second year of drought and the situation is pretty serious. The modest rainfall of the last weeks will not help very much, because we are now getting to the point where demand increases, because plants start growing and taking up water."

The only really good chance of recharging water supplies is in the months when the leaves are off the trees.

She added: "The companies are now getting the message. It is clear that we have got to do something very urgently because - if we have a continuing dry spring and summer - we face interruptions to public water supply in parts of the country."

Lady Young has long taken the companies to task over their leaking pipes, saying that her agency would not approve the building of new reservoirs while "far too much water" is being wasted. Their "profligacy", she adds, makes it hard to persuade the public to economise.

Unknowingly echoing Mr Wells, the retired milkman, she explains: "The British public understandably says: 'Why should we worry, when all that water is leaking away?'"

And leak away it does - on an enormous scale. Nearly a quarter of the water supplied throughout England and Wales never reaches the taps. In Scotland it is even worse - nearly half of it does not get through to customers. Only Bulgaria has as bad a record in Europe. By contrast, in Germany and the Netherlands the loss is well below five per cent. Last year, in excess of 1,700 billion litres of water were wasted in this way in England, Wales and Scotland - enough to supply 14.5 million households.

Thames Water - responsible for two-thirds of all the people affected by the hosepipe bans - has the worst reputation of all. It, alone, routinely loses enough water to supply a city the size of Leeds. Its losses in such well-heeled neighbourhoods as Westminster, Camden and Islington are worse than in many Third World countries.

In much of north London the leakage rate is 60 per cent: more water escapes from the pipes than actually gets through them to the taps. On average, a staggering 260 litres of water are lost every day on the way to each property in the area. That is the equivalent of someone from Thames Water turning up at every home in the area and wantonly flushing the lavatory 32 times a day, every day of the year. And it has got worse: five years ago, Thames was losing 200 litres - or 25 flushes - a day for each property.

London, as Thames Water points out, does have special problems. A third of its pipes are more than 150 years old and they lie in corrosive clay soil. It has tried to get a grip on the problem; it has 1,000 people constantly at work, mending 200 leaks a day, and is replacing 1,000 miles of its pipes by 2010. But, uniquely among Britain's companies, the firm is still due to miss the - lenient - leakage target set by the official regulator for a fifth year in a row

As Lady Young puts it: "London was ahead of the world in its water supply in Victorian times. Now it is a laggard, and is having to play catch-up."

Almost all the other water companies in England and Wales meet their targets, but they are now reining back their efforts, even though some 2.7 billion litres still leaks from their pipes every day. This is because, under guidance from Ofwat, the official water regulator, they try only to reduce leakage to an "economic level" - the point at which plugging leaks stops being cheaper than getting water from new sources, such as tapping rivers or building reservoirs.

Nick Reeves, the executive director of the Chartered Institute of Water and Environmental Management, says: "Ethically and morally, this is not the right thing to do."

He and Lady Young point out that the practice ignores the environmental damage done by abstracting water or constructing reservoirs - and blithely accepts the waste of the money spent on treating the water to drinking standard before letting it seep away.

It is immoral in another way too. The companies have effectively ripped off the country by getting large hand-outs to improve their pipes and other infrastructure, and then have failed to make the necessary investment while their profits and directors' salaries boomed.

When they were privatised, Michael Howard - then the junior minister in charge of the sell-off - boasted that it would enable them to launch "the biggest programme of sustained investment in their history". To make this easier, the companies were sold at about three-quarters of their market value, and given subsidies - including a so- called "green dowry", which was worth £6.5bn.

However, instead of continuing to rise, as promised, investment started falling soon after privatisation, while the water companies continued to push up prices. Profit margins soared to three or four times the level of those of comparable companies in continental Europe, and directors' pay, in some cases, doubled or trebled.

Even last year, water company executives' pay went up by 31 per cent. Now these executives are asking the British people to make sacrifices. Last time there was a major drought, in 1976, when water was publicly owned, they complied readily; consumption dropped 25 per cent.

Will the residents of Le May Avenue, and their counterparts across the country, be ready to do the same this summer? Perhaps instead they will be tempted, foolishly, to bring on a crisis by following the advice scrawled on a Halifax wall 10 years ago, when the hated Yorkshire Water was threatening harsh restrictions: "Get your own back: turn on the taps".

From The Clouds To The Tap: Not enough rain is falling, and too much of the water we have is wasted

Reservoirs

The area worst affected by the lack of rainfall is that supplied by Southern Water, whose reservoirs are only 58 per cent full

Hosepipe bans

These will affect at least five million people across the south of England from next month as the drought begins to be felt

Shower - 30 litres - This is how much is used if it runs for five minutes

Bath - 80 litres - The amount of water used to fill a bath

Garden sprinkler - 24,000

With gardeners facing a hosepipe ban, this is the amount in litres of water used if the sprinkler is left on all day

Golf course - 10,000 - The amount of litres that is used per day for an 18-hole course

Hotel - 650 litres - How much is used per guest per day on average

In the pipeline

There are 1, 000 people at work in London mending 200 leaks a day, repairing pipes that are 150 years old. By 2010 they will have replaced 1,000 miles of pipes

Leaky pipes

Every day a quarter of the water piped to homes in England and Wales never gets there. It leaks away instead. In Scotland the figure is half. In Europe, only Bulgaria has as bad a record

Wasteful companies

South East Water loses 69 million litres through its pipes every day. Southern Water, which serves the area worst hit by lack of rainfall, loses 90 million litres

London's leaking

Thames Water loses 915 million litres through its pipes every day. In parts of north London the leakage rate is 60 per cent