Utility Week

UTILITY WEEK | 19TH - 25TH JULY 2019 | 17 Policy & Regulation Water UK says the gures that We Own It relies on have been shown to be wrong in a number of di erent independent reports, which means their case is "fundamentally • awed right from the start". A spokesman says: "The campaign- ers don't seem to understand the devastating impact on pensioners, savers and the economy as a whole if a government forced through a takeover of the industry at a price well below market value. "We Own It don't explain how the big challenges faced by the water and sewerage industry – like climate change and an increasing population – would be addressed by a substan- tial reorganisation of structures and ownership. There's no attempt to acknowledge the many improvements made since privatisation in 1989 – let alone the further bene ts, such as falling bills, improved services, and increased investment – that compa- nies have set out for future years. They also have no credible answer to the well-documented problems caused by governments not providing state- owned industries with enough money to do their jobs properly. "Thirty years of water privatisa- tion has delivered huge bene ts for consumers and the environment. People now enjoy world-class quality water, our rivers are healthier, wildlife is • ourishing, our beaches are cleaner, and we have major plans for even more improvements. We have the expertise, the organisation, and the access to the substantial amount of investment needed for the future. And that's how we'll be able to continue providing customers with safe, secure supplies of water and improving our precious environment." The founder of We Own It is blunt in her assessment of how privatisation has worked for the water sector. "It has been abject failure," Cat Hobbs says.Œ"Private companies had their chance, now it's ours." The central statistic in Hobbs' arsenal is that shareholders have received £56 billion in dividends over the past 30 years. Her system, she says, would be based on all pro ts being ploughed back into infrastructure and service improvement. The People's Plan for Water, based on suggestions submitted by 600 peo- ple to We Own It's website, highlights several examples of renationalisation worldwide but admits that none repli- cate the scale of transition that would be necessary in the UK. Hobbs has called on the industry to support the proposal, saying: "To the senior directors I would hope they would accept a lower salary to do meaningful work because right now it is not really fair the way it is set up." Shareholders are also being asked to adjust their expectations. Hobbs says the £51 billion of debt that has been built up is the price that nation- alisation will have to pay and nothing further is owed to shareholders. She says: "Our position, which is di erent from Labour's, is that nobody should be investing in water because water is a basic human right and a public service. If people have their pension funds, or shares in water, they should be getting out now and we don't believe they should be com- pensated because shareholders have received £56 billion already." The People's Plan for Water makes several references to the Scottish model of public ownership as a pos- sible direction for England, pointing out that investment per household is 35 per cent higher than south of the border. Asked about the situation in North- ern Ireland, where NI Water was only allocated £900 million of a requested £1.7 billion for the most recent invest- ment window, Hobbs says: "Public ownership alone isn't a panacea. We have to have proper investment in our public services. We have to move away, in general, from the ridiculous policy of austerity, which is damaging our public services across the board. "We need to follow the Scottish Water not the Northern Ireland model in terms of how the funding is man- aged. Water is a pro table industry. It's not rocket science to take that money from our bills and make sure it is being reinvested back into infrastructure." message, which has the potential to pen- etrate the public consciousness unless it is robustly challenged. In the water sector par- ticularly, this message is being compounded by the wider picture that has been painted over the past few weeks. Own goals Following the "dark week" highlighted by Ofwat chief executive Rachel Fletcher aœ er the Southern Water case, we have had a damning report by the Environment Agency, criticisms of complacency among water com- panies from the Consumer Council for Water (CCWater) and an investigation into whether Thames Water has abused its dominant posi- tion in the market. It should be noted that most of these sto- ries contained numerous reasons to be cheer- ful. Fletcher praised the positive work being done by the sector and the improvements Ian McAulay has made at Southern. In the Envi- ronment Agency report, Northumbrian Water was held up as an example for turning itself around from a 2-star to an industry-leading 4-star rating in a year. It should also be noted that across the board the most severe cases of pollution fell in 2018. While CCWater said it was disap- pointed by the actions of water companies, it also revealed 90 per cent of customers are "satis ed" with their water services – a score other industries would kill for. But for too long these positives have been lost in the white noise around failings and own goals. Meanwhile, the nationalisation debate has continued to rumble on and the industry has consistently failed to put up a coherent defence of itself. Is this down to a lack of con dence or communication? A really positive step came with the sign- ing of a public commitment organised by Water UK, tying the sector to some ambi- tious targets in terms of leakage reductions, cheaper bills and ghting climate change. It is also why the innovation fund pro- posed by Ofwat is so vital. Utility companies need to be seen as presenting solutions, not causing problems. While the ultimate aim must be to provide a good service and a fair price, businesses have the potential to be problem-solvers across so many areas of society, through innovativion and close partnerships. This was very evident when I visited Northumbrian Water's Innovation Festival, with 700 organisations tackling issues ranging from protecting rural commu- nities to designing the vehicles of the future. This kind of positive momentum and col- laborative working shows the best of a free market and provides a counterpoint to the tired arguments trotted out by its critics. Renationalisation: time to take back control… …or a very bad idea indeed

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