Lack of transparency in the water industry has led to a house of cards awaiting collapse

Promises that were made when the case for privatisation was put forward in the late 1980s have failed to materialise.

The central tenet that privatisation would lead to investment in the water industry has been exposed. The privatisation of Yorkshire Water has led to less investment in infrastructure, with rate payers bills going primarily towards dividend payments and the associated debt repayments, according to a new report.

With rates as they are, Yorkshire Water would have had £3.5bn to spare, after covering all operational costs, capital expenditure and taxes.

The report also goes on to say that for every £100 of Yorkshire Water’s capital expenditure there has been a financial overhead of £85, due to privatisation. Contrast this with the publicly-owned Scottish Water, which has a financial overhead of £12 per £100.

All the while customers face rising bills. This is unjust and customers should not have to tolerate it. Especially as water companies have been pumping sewage into the rivers and the sea.

A good place for the Government to start tackling the water crisis is to ensure there is greater transparency in the sector. That includes transparency around the ownership of water companies as well as stricter financial reporting requirements.

Too often water companies have obfuscated, leaving the customer to pick up the bill.

The fact that not a single major reservoir has been built since privatisation, tells a story in itself.

Water company bosses and shareholders have rewarded themselves for decades of failure. In no other industry would this be acceptable.