Public ownership of water companies is no silver bullet, report boss warns
The author of an independent report into the state of the UK’s water industry has told a Parliamentary committee that taking water companies into public ownership was not an easy fix, and was not guaranteed to work.
Former civil servant Sir Jon Cunliffe was tasked by the Government to produce the report shortly after Labour came to power.
Earlier this month, Sir Jon produced an interim report, which found deep-rooted failures in the system.
Yesterday, he told the committee that the issue had not been given sufficient prioritisation by previous Governments.
He said: “To go from spending just under £6 billion on environmental investment to £24 billion, I mean one doesn’t wake up in the morning and discover that one needs four times as much.
“Somewhere along the line, milestones weren’t set, things were put off, and the result has been this enormous increase in proportional terms, a 36 per cent increase in real terms, of customer bills.
“We need to put in place a fairly extensive Government plan for water, which sets out the end points, which has some milestones in it. And this is not just for the water industry, it’s about strategic planning for water as a whole.”
Sir Jon was also asked about ownership models, and whether one such as public ownership provided more advantages over others.
He said: “A proposal for Yorkshire Water to go to not-for-profit was turned down by Ofwat quite rightly, because it would have loaded the company up with debt.
“If you can get to a mutual (company) then that’s fine, but you have got to get there.
“If there are other ownership models that can be achieved, we can talk about how they can be delivered, but we haven’t found that link to say ‘this ownership model produces the culture we want.’ We just haven’t.”
But Andrew Pakes, Labour MP for Peterborough, said: “I think there is a challenge within that. The inheritance of your starting point is a private model which has largely failed on a range of measures.
“The water system is failing. It’s failing the needs of the British public, it’s failing the needs of the environment, it’s failing public satisfaction. Where we’re starting from is the inheritance of failure, if that’s your only starting point I can see why it may not lead to other models.
Sir Jon said: “If the question is will we recommend a wholesale move to another model… what we won’t do is move the whole sector to a different model for two reasons. One is I’m not sure how you get there without spending a very large amount of money to buy the assets, and the other question is if I had to look at the evidential link between models and outcomes, I don’t find a strong correlation.
“It’s not tinkering, it’s trying to be evidence based.”