Why a removal van is needed for Yorkshire Water bosses - David Behrens
It took just four weeks from the by-election in Makerfield to the arrival of Pickfords at Number 10. That’s how fast we can remove a powerful figure from office when we set our minds to it. So why is it taking so long at Yorkshire Water?
Keir Starmer may not have been the most natural leader of his age but his was a golden voyage compared to the shipwreck over which Nicola Shaw has presided.
She, you will recall, is CEO at our region’s most despised and worst managed utility. Under her leadership, Yorkshire Water has sunk to joint last (alongside the effectively bankrupt Thames Water) in the Ofwat rankings and it continues its race to the bottom.
But for Nicola, the ocean floor is lined with gold. She has salted away £3m over two years in salary, bonuses and payments from offshore affiliates. And now we learn that her earnings for next year will hit £2.1m if she meets her targets. That figure is buried on page 209 of the company’s newly published annual report.
Let’s put it in context. It’s not Nigel Farage money, I’ll grant you that, but it’s a darned sight more than the £172,153 Keir Starmer took home.
Yet by any sensible measure, her stewardship has been a disaster. She has been at the helm for four years, twice as long as Starmer, and time aplenty to have steered the ship toward calmer waters. But Yorkshire Water is stuck in reverse, mired in its own sea of effluent.
Pollution incidents across the county rose by 72 per cent in the last year. Bathing spots in Scarborough and Ilkley have become veritable sewage farms. If there weren’t signs outside you’d hardly be able to tell one from the other. Meanwhile, bills went up and shareholders reaped £81m in dividends.
No wonder then that the company is trying to salvage its reputation. Its annual report and accompanying performance summary runs to 789 pages of hot air but the Harrogate MP Tom Gordon summed it up in two words. Yorkshire Water, he said, was morally bankrupt.
He thinks Nicola Shaw should resign and no-one’s arguing. Every one of those 789 pages strengthens the case against her.
But here’s the problem: unlike the outgoing and incoming prime ministers, Nicola Shaw isn’t working on our behalf. Any pretence of doing so is disingenuous. Her job is to make money for her shareholders, most of whom are outside the UK and have little interest in whether the drains leak or the rivers are safe. They and she are running a business, not a public service, and the two are almost entirely incompatible.
This ought to be obvious. It’s perhaps why no other country – not even Scotland or Wales – relies on a wholly commercial sector to supply clean drinking water and return it safely to the environment.
For Yorkshire Water, that process is secondary. Its business model is to deliver what the regulator requires of it – no more, no less. Its failure to do even that is what sets it apart from the other suppliers.
And the regulator is a rudderless ship, tossed about on a tide of vested interests. Only now, after stories about its impotence leaked out, is it changing the way water companies record pollution incidents to stop them whitewashing the figures.
It would be tempting to assume that renationalisation would unblock the system at a stroke but it’s not that simple. The infrastructure has been eroded by years of underinvestment of exactly the sort that privatisation was supposed to end.
The experience in Wales tells its own story. In 2001, the local supplier became a non-profit company when it bought out its American owner. It is now in better shape than its counterpart in Yorkshire but it has not wrought the revolution its customers might have expected. Their quarterly bills are higher than average and last month Ofwat levied a £44m fine for sewage plant breaches.
As a matter of fact, Yorkshire Water’s parent company proposed a similar deal at around the same time, which would have seen it run as a not-for-profit concern. The then regulator rejected it on the grounds that there would be no obvious benefit to consumers; just a huge debt.
That’s the legacy of the privatisation experiment of the 1990s. The industry’s debt mountain today is close to £60bn. It’s used to pay shareholders and executives like Nicola Shaw but if they go tomorrow, the debt remains and becomes ours to bear.
The question now is what our new PM is going to do about it. He is hugely critical of the water companies’ performance; who isn’t? But he wants greater public control rather than wholesale renationalisation.
How his controls can be made more effective than the existing ones has yet to be explained. In the meantime he could show intent by offering Nicola Shaw the services of those Pickfords vans outside his office.