The myth that water privatisation in England delivers a more efficient and effective water industry has been debunked in a report by the New Policy Institute. The report details: the current ownership pattern of the industry and how it has changed since privatisation in 1989; evidence on household bills, profits, dividends, investment levels, interest and tax over time and a number of possible questions that policy makers need to address.
The key conclusion is that its ownership structure has changed beyond recognition from its initial ’popular capitalist’ model. Though highly profitable, far more so than the energy industry, the industry pays little tax. However, despite sustained real increases in customer bills, it is now unable to finance large-scale investment without government support.
In Scotland, we of course resisted privatisation and voters in England, by more than two to one, wish they had done the same. In fact polls also show support for bringing all utilities back under common ownership. The real benefits are highlighted in this chart from the report.
In Scotland we have less profit/surplus, no dividends and Scottish Water pays its taxes.
No such investment problems in Scotland either. Scottish Water has just reached a major milestone of a massive pipe upgrade stretching more than 2,600 miles. The £113 million programme - Scotland’s biggest-ever water mains renewal project - will have covered a distance equivalent to that from Edinburgh to Mali. The Cabinet Secretary for Infrastructure, said: “The extensive reach of the scheme, stretching from Shetland to the Scottish Borders, means households throughout the country are now benefiting from an enhanced water supply while local areas have been boosted by the support of extra jobs. Scotland’s water quality is at its highest level ever and we are striving to improve on this through the renewal and maintenance scheme which forms part of the Scottish Government’s wider £2.5 billion water and waste services investment.”
As a consequence water quality in Scotland is at its highest ever level - 99.88% of supplies taken from customer taps met the required standards in the latest water quality report. Water leakage has also reduced by 44% since 2002/03.
Scottish businesses are also spending £65m less on water. Not as some claim because of competition, because there is very little of that, but because of better water efficiency. Scottish Water’s Business Stream has brought a real focus in recent years on the environmental and cost benefits of using water better.
All of this is perhaps a timely reminder to the Scottish Tories and Liberal Democrats, whose regular calls to privatise Scotland’s Water, not surprisingly, has little public support. We should also be vigilant over what is happening in Europe with EU Commission attempts to privatise water services. Despite a resurgence of public water services in recent years, water privatisation is on the agenda in many European countries now austerity policies are imposed and governments are scrambling to find money.
Cross posted on Utilities Scotland