Once the water companies were privatised, they took out massive loans and performed no maintenance. The loans were purely to pay shareholder dividends. Now they're loaded down with debt.
Atop this, that crumbling infrastructure can't handle the increased water flow that's due to rainfall increases. So there's been a general trend of dumping raw sewage into rivers (the fines are cheaper op ex than the capex needed to fix the situation).
I don’t defend the decision; but when it was enacted it did work; in exactly and only that specific circumstance, for an exceptionally short period of time. It offloaded a comparatively small bill to the private sector, in exchange for the monopolies; a terrible idea IMHO.
I liken it to a house move. If I must pay removal people, I can either pay them what they ask, or burn everything I own and save on the price of the movers. Burning everything might save me money during moving week, but after that one initial saving, I will be paying ungodly amounts to repurchase everything I burned.