Britain’s water industry is undergoing the biggest overhaul since privatization more than three decades ago, prompted by a scandal over systematic sewage spills and chronic pipe leaks. Customers are shouldering the cost of fixing the problems through the largest bill increases on record for households and businesses.

The crisis follows decades of poor regulatory oversight that allowed water company owners to pay themselves billions of pounds in dividends instead of using the money to maintain the infrastructure. Things are so bad that Thames Water Utilities Ltd., which serves a quarter of England, may eventually need to be run by the government — at least for a while.