Paul Payne, Director of Risk and Advisory at Binnies, explores the need for robust asset health
The recent airing of Dirty Business on Channel 4 has intensified public scrutiny of the UK water sector. The anger, frustration and distrust expressed in response are real and, dare I say it, understandable. Pollution incidents, rising bills, dividends, executive pay, regulatory reform: all of these issues deserve examination.
I have worked inside water companies, alongside regulators including the Environment Agency and Ofwat, and now advise the sector. I am also a customer. I know the industry is not perfect; I also know that the vast majority of people within it are motivated by public service, not personal gain or misconduct. But whether one is a defender of the sector or one of its fiercest critics, there is a foundational issue that should unite us: the long-term health of the water and wastewater asset base. Because whatever we think about ownership models or regulatory structures, the pipes, pumps, treatment works and reservoirs do not respond to ideology. They respond to physics, chemistry, loading, age and maintenance. And they are ageing.
The infrastructure we don’t see – but rely on completely
Every day we depend on:
- water treatment works producing potable water of exceptional quality
- thousands of kilometres of buried water mains
- pumping stations operating continuously
- wastewater treatment works protecting rivers and bathing waters
- sludge processes generating renewable energy and biosolids.
We turn on a tap, we flush a toilet. We assume continuity. This is not accidental. It is the result of an enormous, complex asset base that has been built up over decades, and in many cases, more than a century. The central strategic question for the industry is not simply “Who owns it?” or “Who regulates it?”, it is: “Do we truly understand the health of this infrastructure, and are we maintaining it at a sustainable level to support both current and future use?”
Defining the core concepts
If we are serious about rebuilding trust and protecting public health, we need disciplined clarity around three concepts:
- asset criticality – what are the consequence if it fails?
- asset health – how likely is it to fail?
- asset risk – the combination of likelihood and consequence.
This sounds simple. It is not.
A deteriorating low-criticality asset may be acceptable to ‘manage to failure’. This is in contrast to a subtly degrading high-criticality asset, which may represent a serious latent risk. Without a consistent, evidence-based understanding of both consequence and condition, investment decisions can become subjective and reactive rather than strategic.
The risk of an ageing asset base
Assets age in both predictable and unpredictable ways:
- mechanical wear increases failure probability
- corrosion reduces structural integrity
- ground movement stresses buried pipes
- climate variability increases hydraulic loading
- population growth alters demand profiles.
If replacement rates fall below sustainable levels for prolonged periods, risk accumulates quietly. The public sees the outcome in terms of bursts, spills and water restrictions, but rarely the underlying trajectory of deterioration. Critics often argue that the system has been subject to underinvestment. The industry often argues that it has delivered significant capital programmes. Both statements can be true, depending on the timeframe, geography and asset class. What matters is whether renewal r
The missing discipline: end-to-end asset health management
Across the sector there are examples of excellent practice. What remains inconsistent is the full integration of asset health management across seven essential steps:
- Validated asset registers – clean, structured, reliable data
- Consistent criticality scoring – clear understanding of consequence
- Defined management strategies – managed run-to-failure where appropriate, proactive monitoring where necessary and advanced methods of prediction of asset failure where the consequences are not an acceptable option
- Robust health indicators – both lagging (failures, reliability, maintenance history) and leading (performance deviations, electrical signatures, vibration)
- Predictive modelling for critical assets – using advanced analytics to anticipate degradation before service impact
- Enterprise-level risk aggregation – rolling up asset-level risk across multiple utilities to a corporate level of exposure in a consistent and repeatable way
- Transparent alignment to risk appetite – clear articulation of how much risk society is willing to tolerate.
Individually, these steps are not groundbreaking. Collectively, executed consistently, they are transformative. Without them, the industry struggles to demonstrate in objective, quantifiable terms whether it is maintaining infrastructure health at the level public health not only demands but needs.
So why is asset health synonymous with public health?
Water infrastructure is not just an engineering system, it is a public health protection system.
- Drinking water safety depends on treatment resilience.
- Environmental protection depends on wastewater reliability.
- Economic productivity depends on uninterrupted supply.
If critical assets degrade unnoticed, the consequences extend beyond regulatory penalties. They affect communities, ecosystems and confidence in essential services. The health of the asset base underpins the health of our society.
A point of convergence
Here is where supporters and detractors of the industry may find common ground:
- those who believe the sector has failed should demand transparent, measurable evidence of asset health and sustainable renewal
- those who defend the sector should welcome that transparency as proof of responsible stewardship.
Anger may be understandable, but asset deterioration is not solved by anger. It is solved by disciplined understanding, sustained investment and long-term planning.
From narrative to evidence
If the industry wants to restore trust, it must move beyond reassurance and towards demonstrable proof.
- What proportion of high-criticality assets are in good health?
- What is the sustainable replacement rate for water mains and sewers? This should be a sustainable level of investment that maintains a sustainable service level.
- How does current investment compare to long-term deterioration modelling?
- Where does enterprise risk sit relative to declared appetite?
When those answers are clear, public debate becomes informed rather than emotive.
The strategic imperative
Regulatory reform may come. Governance models may evolve. Structures may change. None of that alters the fundamental reality: pipes age, pumps wear and treatment assets fatigue. If we fail to understand and maintain the health of the water and wastewater asset base, no structural reform will compensate. Conversely, if we develop a transparent, consistent, evidence-led approach to asset health and align investment accordingly, we will create the foundation for restoring trust. The real debate is not just about who controls the system, who owns the companies or who gets paid what. It is about whether we are stewarding the physical infrastructure on which public health depends – rigorously, sustainably and honestly.
If we get that right, much of the rest will follow.
More about Paul Payne
Paul is an asset management professional with 28 years of experience in the water and aviation industries and has held senior roles in various companies, including Anglian Water, Manchester Airports Group and Welsh Water. Paul is passionate about asset management in the water industry, having spent nineteen years working for Anglian Water and three years in Welsh Water as Director of Asset Planning.