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Water companies: public service or extraction industry?

  • by JW

The debates around our water resources.


The recent kerfuffle over limiting the ability of UK water companies to allow the flow of sewage into rivers has raised all sorts of issues:

Breaking: new controls on dumping sewage – Vision Group for Sidmouth

Not least that the latest measures proposed will not ‘even come remotely close’ to dealing with the issues:

BBC Breakfast on Twitter: ““It’s doesn’t even come remotely close” On #BBCBreakfast musician and campaigner Feargal Sharkey responds to the government’s partial U-turn on dumping sewage in waterways.” / Twitter

Facebook (for the complete interview)

One of the pivotal and very political issues raised by Feargal Sharkey are the profits extracted by the water companies since privatisation:

England’s privatised water firms paid £57bn in dividends since 1991

Critics say while continuing to pay huge dividends they have failed to carry out significant national infrastructure works to improve the water and sewerage system… But according to the analysis by David Hall and Karol Yearwood of the public services international research unit of Greenwich University, the nine privatised companies in England have amassed debts of £48bn over the past three decades – almost as much as the sum paid out to shareholders.

England’s privatised water firms paid £57bn in dividends since 1991 | Water | The Guardian

The UK’s water regulator Ofwat helpfully explains:

Profits and dividends
Why do the companies need to make profits?

Water and sewerage companies implement large-scale investment programmes to maintain their assets and meet their legal environmental and quality obligations. But the companies do not collect from customers all of the money they invest in the year in which they spend it. So, companies must fund a large proportion of this investment from the competitive financial markets, either through borrowing (debt) or through investment from shareholders (equity).

Profits and dividends – Ofwat

But as Philip Inman in the Observer points out this is ‘an English problem’:

England’s water system: the last of the privatised monopolies – for now

Analysis: taking control of the utility would benefit consumers and, more importantly, the environment
This is a strictly English problem. Welsh water became a not-for-profit organisation in 2001 and Scottish Water went into public ownership. England’s water system hosts the last of the privatised monopolies. You can shop around for gas and electricity, telephone and broadband. Not water.
Environmental groups argue that climate change means water companies must become part of a coordinated effort to protect water supplies and that this cannot be done while they remain private.
At the moment, they have the resources to outwit the poorly resourced regulators in Ofwat and the Environment Agency. Local councils, which also play a role in protecting watercourses, have also seen their budgets cut and experienced staff losses, leaving them without the clout to confront private sector operators.
Paris and Barcelona are among the world’s major cities to take water under direct control and integrate policies that promote its better use by households, businesses and landowners. It must be only a matter of time before England follows suit.

England’s water system: the last of the privatised monopolies – for now | Utilities | The Guardian

This is of course a massive debate – one being had in every corner of the globe:

Top Ten Reasons to Oppose Water Privatization SHORT.doc

Water Is NOT a Commodity, Water Is a COMMON Resource: The Rationale for States to Hold Groundwater in the Public Trust |

The Impact of Privatisation on the Sustainability of Water Resources | IWA Publishing


So, there is the debate over ‘commonly held resources’:

Futures Forum: The triumph of the commons

Futures Forum: Elinor Ostrom: sustainable development … and the ‘tragedy of commons’

Then there is the debate over what exactly makes a service ‘public’:

Futures Forum: Rethinking public services

And then there is the debate over water resources:

Futures Forum: Who owns the water?

Futures Forum: The Circular Economy … and looking after our water at a local level

But, finally, the debate is essentially about the climate:

Futures Forum: “The real-life Mad Max will be about water”

Futures Forum: Climate change: Environment Agency says that within 25 years England will not have enough water to meet demand

photo: Theatrical release poster by Jim Pearsall: The film was inspired by the California water wars, a series of disputes over southern California water at the beginning of the 20th century, by which Los Angeles interests secured water rights: Chinatown (1974 film) – Wikipedia