Water ownership

There are 21 private water companies operating in England. Many are owned by banks, private equity firms or foreign investment funds. Find out how this affects your water bill and water services, and why UNISON is arguing for a new model of ownership.

Who owns our water? Is the market the best way of providing a vital necessity of life? Does the drive for profits mean lower prices and more efficiency?

Water supply

There are 21 private water companies operating in England, answerable to their shareholders. They are overseen by economic regulator Ofwat.

Before 1989, water supply in England and Wales was in the hands of 10 public regional water authorities, which were then sold off.

Did you know?

Ofwat says most water companies won’t be required to cut leaks before 2015 – and the entire industry will only save around 1.5% in that period.

Now that they are private companies, many are owned by banks, private equity firms or foreign investment funds.

Thames Water, for instance, is owned by Kemble Water Holdings – an investment consortium led by Australian banking and finance group Macquarie, with recent shareholdings taken by the Abu Dhabi Investment Authority and the China Investment Corportation.

Similarly, when Cheung Kong Infrastructure was buying Northumbria Water at the end of 2011, it sold Cambridge Water to South Staffordshire Water. South Staffordshire is wholly owned by the US based Alinda Infrastructure Fund.

Scotland, Wales and Northern Ireland

Scottish Water is a publicly owned corporation answering to the Scottish government.

Northern Ireland Water Ltd is a government owned company, having been an executive agency within Northern Ireland’s department for regional development until 2007.

Seven out of 10 voters want the control of water supplies taken out of the hands of major companies, many foreign-owned, and put back into public ownership.

The Express, 6 May 2012 “71 per cent say renationalise water industry”

Dŵr Cymru Welsh Water is a “single purpose” company limited by guarantee with no shareholders.

It was run as a PLC like other companies until the collapse of the Hyder combined utility project in 2000..

Prices and service

Ofwat calculates the average water and sewerage bill in England and Wales at £340 for 2011-12, compared to £236 when water was privatised in 1989-90.

This is less of a rise than seen in gas and electricity prices.

According to a report in The Guardian in May 2012, 3.4bn litres of water – almost a quarter of the entire supply – leaks from the system every day.

Ofwat says most water companies won’t be required to cut leaks before 2015 – and the entire industry will only save around 1.5% in that period.

Thames Water, owned by Australian banks and Chinese sovereign wealth, is one of the worst offenders, losing 665m litres of water a day – enough to fill Wembley Stadium every 36 hours.

Thames Water has paid out £5bn in dividends since 1990, but has failed to collect and store enough water and is now planning to divert water from the river Severn.

Water UK, the body representing the companies, says the cost of making the system watertight would be “too expensive” for customers to bear – although the original price of buying the nationalised utility was cut because of the major investment in infrastructure that would be required.

What is the government doing?

A new Water Bill has been introduced, following consultation on a white paper in 2012. This is designed to “make the market work better and bring new entrants in”.

What’s happening with the draft bill

UNISON believes the total belief in market-based solutions ignores the obvious failings of the market and does little to address the challenges facing many UK households as incomes fall.

Water is a right, not a luxury, and many millions of households are struggling with their domestic bills.

Dave Johnson, UNISON national secretary

UNISON national secretary Dave Johnson says: “This is a missed opportunity by the Tory-led government to show that they have the interests of the public at heart. Instead, it comes as no surprise that this Bill has been used to promote more ideological, market- driven competition into the water industry.”

What is UNISON doing?

We are arguing for a new model of ownership, looking at the examples of Scotland, Wales and Northern Ireland.

The union is also backing the Make Water a Human Right European citizens’ initiative.

Find out more about Make Water a Human Right

 

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