Utility Week

UTILITY WEEK | 22ND - 28TH MARCH 2019 | 13 Policy & Regulation In the public interest "There's a real danger we go back to a world where decisions are driven by political short-termism rather than the needs of customers and theenvironment" Chief executive's view Michael Roberts, Water UK A number of recent articles in Utility Week have challenged the current set-up of the water and sewerage industry in England, suggesting that a state takeover is the best way forward. There are at least three good reasons to steer well clear of such arguments. First, the claim about overwhelming public support for nationalisation is based on an opinion poll in Sep- tember 2017. But a new survey by ComRes, carried out in February this year, shows only two in - ve (42 per cent) British adults saying they support the nationalisation of water and sewerage services in England – about half the level claimed by pro-nationalisation voices. The same poll also shows little appetite for the Labour Party idea that local councillors and trade unions should dominate the boards of the new regional water authorities, which would take over the private companies under nationalisation. Only one in three say they have con- dence in a combination of local councils and trade unions running the water industry. The survey also shows that trust in water companies remains very high, with nine in ten (90 per cent) trusting their water company to provide a reliable service and ensure good water quality – a higher trust score than for energy companies (79 per cent), train companies (77 per cent), newspapers (77 per cent), and the government (74 per cent), with 65 per cent professing more trust in water companies than in local councils. Second, the nationalisation proposals oŒ er no practi- cal plans for protecting the environ- ment, improving services or dealing with the big challenges of climate change and population growth. Instead of building on nearly 30 years of improvements, made possible by bringing in billions of pounds of private invest- ment to undo the problems le' by nationalisation, there's a real danger we go back to a world where decisions are driven by politi- cal short-termism rather than the needs of customers and the"environ- ment. In his recent Utility Week article, Labour Party MP Gareth Thomas admits that lack of investment pre-privatisation was the result of political decision- making. Putting water back in the same constrained public sector funding pot as health, education, defence, policing and the rest risks relegating it once again to tak- ing part in an annual competition for - nancial support. It's a live issue today in Northern Ireland where, due to current public spending constraints, there's a big gap between the money Northern Ireland Water has asked for and what government will give it. Of course, the English private sector model is not the only way to provide services. But to suggest, as some do, that the industry needs to be publicly owned to be run in the public good is not supported by the evidence. According to a recent study of water and wastewater utilities in six European countries by Global Water Intelligence, the sector in England and Wales has out- performed the nationalised water industries in France, Ireland, Italy and Spain since 1990 on the most impor- tant water and sewerage measures. The water sector in Germany delivers a broadly similar quality of service to that of England and Wales, but at greater expense. Which brings me to my third and - nal point. Like any model, the English system is not perfect, but its critics - nd it incredibly diš cult to credit not simply what has been achieved, based on nearly £160 billion of private investment over the past 30 years, but how far the sector is already moving on from the world they criticise. Recent years have seen a change in investor pro- le, with a growing number, such as pension funds, in it for the long term. Combined with the challenging price review currently taking place, it has set the context for lower returns and greater eš ciency. The business plans now being - nalised with Ofwat will commit companies to invest £50 billion over the next - ve years, cut bills by 4 per cent in real terms, undertake the biggest leakage reduction programme in 20 years, and make nearly twice as much help available to people who struggle to pay. Those plans have been prepared a' er an extensive customer engagement programme, and include exciting ideas for greater customer empowerment. Companies' ambitions to do the right thing go beyond the business plans, whether in the form of our goal to cut leakage by 50 per cent by 2050, or in the active discussions with regulators and government about how we can improve resilience over the longer term. This is a sector working energetically with its stake- holders on the most important challenges it faces. There is plenty still to do, but there should be no doubting our ability and commitment to operate in the public interest.

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