MP urges water firm to put more profits into upgrades after Sheffield gas outage

How much more damage can the privatised water companies’ lack of investment do?

They pollute our rivers and bathing beaches and now cut off our gas! – Owl

A private water company responsible for maintaining a 50-year-old asbestos-cement pipe that burst and left thousands of people in Sheffield without gas should spend “much more” of its £242m annual profits upgrading its infrastructure, an MP has said.

Helen Pidd 

With snow on the ground and temperatures below zero, at least 200 households in the area of north-west Sheffield were still without gas on Monday, 11 days after Yorkshire Water’s mains pipe burst and flooded the gas network with more than 1.5m litres of water. About 2,000 homes were initially affected.

Olivia Blake, the Labour MP for Sheffield Hallam, said Yorkshire Water had “very deep pockets” and should properly compensate everyone affected in the Stannington and Malin Bridge area of Sheffield, as well as invest vastly more of its profits in replacing old pipes at the end of their lifespan.

“Not enough of their profits are going into upgrading their infrastructure, and we see the results not just in the current situation in Sheffield but also in the sewage they allow to flow into our rivers and waterways and the leaks popping up all over communities,” said Blake, who was previously the shadow water minister.

She added: “There have been a series of failures over many years, clearly driven by a want for profit. Yorkshire Water has very deep pockets and should be doing much more.”

Feargal Sharkey, the water campaigner and former frontman of the Undertones, said the Sheffield situation showed “it’s time to make water company directors personally and collectively liable”.

Experts say the 23,000 miles (37,000km) of asbestos-cement piping laid in Britain is coming to the end of its 50-70 year lifespan, with 6% of Yorkshire Water’s pipes yet to be replaced.

The Sheffield pipe had burst before, most recently in 2013, Yorkshire Water said. But the company added it had “no concerns” about drinking water in the Stannington and Hillsborough area after collecting samples since the incident began. About £500,000 had been spent on mains pipes in the affected areas over the past two years, a spokesperson said.

A spokesperson for Cadent, which runs the gas distribution network, said on Monday morning that “just over 200 homes” were still waiting to be reconnected after the incident on 2 December. Most of those are in Malin Bridge, which is at the bottom of a hill and so was particularly badly affected as the water in the pipes was pulled down by gravity.

“We are hopeful that all of these properties will be back on gas by the end of the day,” said the spokesperson. Eight of those are on the vulnerable priority register, she added.

According to its annual performance report, in 2021-22, Yorkshire Water made £242.3m operating profit on a turnover of £1.18bn. The company said it spent £434.1m “acquiring, maintaining, and enhancing assets and infrastructure”. It paid out £52.6m in dividends, which a spokesperson said were “payments to its holding company to cover operating costs and service costs for debt held at holding company level”.

The company was penalised £10.2m by the regulator for not meeting targets on internal sewer flooding and a further £2.48m for pollution incidents, and £7.42m for a total of 41 “significant water supply events” that left customers without water for at least 12 hours.

Yorkshire Water has so far agreed to an automatic £30 payment to all affected customers in Sheffield to go towards excess energy costs. It is also inviting households to claim for additional costs incurred as well as water damage via a form on its website.

Yorkshire Water said: “Our profits are invested directly in improvement to our clean and wastewater networks to develop innovative ways of working and delivering the best value for our customers. We have not paid dividends to investors for the last seven years and during that time have invested £2.5bn in maintaining, innovating, and growing the business and its assets to be fit for the future.”