The privatisation of England’s water industry is not the sole reason for its failings, according to the architect of the government’s water reform plan. Sir Jon Cunliffe, a former Bank of England deputy governor, has warned that there is no “simple solution” such as nationalisation to address the sector’s challenges.
Cunliffe, who was tasked by the Labour government to review the water industry, said the problems faced by the sector, including the sewage scandal, frequent tap water outages, and lack of preparedness for drought, cannot be solely attributed to privatisation and profit-making. His report, which formed the basis of the government’s recent white paper on water reforms, suggests that the current privatised system “can work” but will require significant effort and change.
The white paper adopts many of Cunliffe’s recommendations, including the introduction of a supervisory model, greater technical expertise in a new super-regulator, and turnaround regimes to help water companies address issues quickly. However, the paper has faced criticism from campaigners who argue that the problems will not be solved as long as the companies are run for profit.
Feargal Sharkey, a water campaigner and former Undertones singer, said ministers have failed to grasp the underlying issue of “corporate greed.” Cat Hobbs, the CEO of the campaign group We Own It, believes water companies should have anti-sewage groups and household representatives on their boards to ensure true accountability.
The recent water outages in Kent and Sussex, which left tens of thousands of people without drinking water for days or even weeks, have also come under scrutiny. David Hinton, the chief executive of South East Water, has faced calls to resign over the incidents.
Cunliffe defended the white paper’s proposal to let water companies off fines, arguing that this approach is necessary to ensure that failing companies can invest in their infrastructure rather than spending millions on penalties. However, he acknowledged that there must be sanctions for poor performance and that the process should not be an “easy option” for the companies.
Overall, the debate surrounding the future of England’s water system highlights the need to balance the interests of privatisation and public needs. While Cunliffe’s report suggests that the current model can be improved, the ongoing challenges and public outcry suggest that more radical reforms may be necessary to address the systemic issues plaguing the industry.