There must be a way forward for our water industry
The political parties are unable to agree about what should happen next.
With businesses like Thames Water heavily in debt, is renationalisation the answer? Labour ministers, who are not normally shy about praising state ownership, are not keen since the costs would be enormous, probably around £100 billion.
Moreover, since the industry struggled to raise money for investment when it was run by the state, why would reverting to the days before privatisation make any difference? The Water Commission chaired by Sir Jon Cunliffe, former deputy governor of the Bank of England, was specifically told not to consider renationalisation as an option in its review.
Nonetheless, it has been looking at alternative models such as mixed public-private arrangements. The Government would retain a golden share and control while the private sector would still be expected to drum up the investment rather than the taxpayer.
Nigel Farage, the leader of Reform UK, says this is an approach he would favour if in office and it may be something the review recommends.
On the other hand, in his preliminary findings Sir Jon said it was by means clear that any particular model equated to better outcomes. 'The Commission's Call for Evidence set out preliminary analysis that suggested no clear, consistent causal link between ownership models and water company performance on a range of metrics and called, specifically, for more evidence on this issue'.
There is one thing that unites everyone and that is the uselessness of Ofwat as a regulator and the need to replace it with something that works. On its watch the industry has come close to bankruptcy and vast sums have been paid out in dividends while pollution of rivers, lakes and seas has risen dramatically. Serious incidents have risen 60 per cent in a year, according to the Environment Agency.
Will today's review usher in the fundamental changes that are needed or merely see the mess continue? It would help if the politicians could agree on a way forward for dealing with our most precious commodity.
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