Report on UK Water industry shows that 25 years after privatisation problems and questions are mounting

(25 April 2013) Water privatisation is on the agenda in many European countries now austerity policies are imposed and governments are scrambling to find money. Water privatisation is hotly contested. It was the [first defeat for Thatcher->art9426] as initial proposals run into very broad opposition. International evidence of [PSIRU->] has demonstrated the experience across the world with privatisation and concession of water services with many countries and [municipalities reversing->art8683] their decisions to allow this industry to operate in the hands of private companies. The myth that [privatisation of water services->art8968] brings more efficiency and effectiveness has been demonstrated to be a false claim. It is important to go back to the country where such ideas originated, the UK, and ask the question: 25 years on –where is this industry. This is what Unison, the UK public service union, commissioned the New Policy Institute to do. The report details: - The current ownership pattern of the industry and how that has changed since privatisation in 1989 (including stock exchange listed, private equity, foreign multinational). - Evidence on household bills, profits, dividends, investment levels, interest and tax over time and as associated with different ownership models. - Comparisons of different models for water ownership and control across the UK. - A number of possible questions that both policy makers, politicians and the public now need to address at this industry. The key conclusion is that this is a very unusual industry which since privatisation nearly 25 years ago has markedly changed its ownership structure from its initial 'popular capitalist' model. Whatever has been driving this change, there is no reason to think it has been customer needs. Though highly profitable – far more so than the energy industry, which typically attracts far more headlines - the industry pays little tax. But despite steady and sustained real increases in customer bills, it is now unable to finance large-scale investment without government support. This report sheds new light on the effects of water privatisation in the longer term: it is bad public policy. - [For the final report->art9673]