I’m no policy wonk, I’m a plumber from Elephant and Castle, but I’ve watched in horror as the UK water system has been sucked dry by fat‑cat funds and foreign investors. For years these vampires have been taking bill-payers’ money, promising to upgrade the creaky network, but trousering the cash instead.
Deeply broken
Today we have a 465-page bombshell of a report by former deputy governor of the Bank of England, Sir Jon Cunliffe, telling us what we already knew – the water industry is deeply broken.
In my book as a general rule the private sector makes a better at fist of running things than the government ever does. But when you’re dealing with financial institutions with no skin in the game past squeezing every last penny and making a clean getaway, different rules need to apply.
Corporate blood-suckers
What these corporate blood-suckers have done is effectively asset-strip the UK’s water network in the full view of various governments and bill-payers.
Their trick was to borrow as much as they possibly could against their respective water companies, pay out huge salaries and dividends, while spending as little as possible on the networks that deliver water to homes and businesses.
Multi-Billion quid confidence trick
And their confidence trick was working quite nicely as companies like Thames Water (the UK’s largest) managed to rack up a staggering £16.8 billion of debt, while last year the same company, with a water monopoly of over 16 million customers, made a loss of £1.6 billion.
To fix its balance sheet and deal with the £23 billion worth of urgent repairs Thames has asked the water regulator Ofwat permission to raise the price of water to consumers by 59%. Unsurprisingly Thames were told to naff-off!
Cluster-Fuck!
So, what has Sir Jon got to say in his report? I believe the phrase that best sums things up, which he was unable to put in his almost 500 pages of findings is ‘cluster-fuck!’
Or for those who want a bit more detail, here are Sir Jon’s major findings below.
- Too many regulators for one industry.
- Regulators need more powers, and be prepared to use them.
- Low-income households need more protections built in.
- Long-term government strategies for investment (not 5-year cycles).
- Compulsory introduction of smart metres.
Bills must still rise
Even when recommendations are adopted, Cunliffe admits that water bills will have to rise in coming years in order to cover the estimated £104 billion of infrastructure fixes, which he says:
“… that’s coming from customers or the government. Without radical change, it’s us paying for decades of corporate mismanagement.”
Scandalous
People in my business know you don’t cut corners. But for 35 years, these water firms have cut corners on investment, cut services to the environment, and filled shareholders’ pockets. Meanwhile, Ofwat let it happen. It’s like the regulator was mesmerised by the water companies’ spin. It’s scandalous. We have sewage dumping, chronic leakages, bills going up while service goes down.
Crooks in suits must answer for their actions
Yes the system needs to be fixed urgently, and money spent on the water networks, but does anyone feel like me that there are some crooks in suits out there who haven’t acted entirely within the law?
Somebody needs to answer for the billions of pounds that have been syphoned out of the UK water system since 1989.
