Water privatization in England

Water privatization in England was undertaken in 1989 by the government of Margaret Thatcher which privatized the ten previously public regional water and sewerage companies in England and Wales through divestiture (sale of assets). At the same time the economic regulatory agency OFWAT was created, following the model of infrastructure regulatory agencies set up in other sectors such as telecommunications and energy. The Drinking water Inspectorate (DWI) monitors water quality and the Environment Agency monitors river and environmental pollution.

Water privatization in England and Wales remains controversial. A 2001 study by the Public Services International Research Unit, which is affiliated with trade unions and opposes privatization, stated that
* tariffs increased by 46% in real terms during the first nine years,
* operating profits have more than doubled (+142%) in eight years,
* investments were reduced and
* public health was jeopardized through cut-offs for non-payment. [ Hall and Lobina 2001 ]

At privatization the industry's 4.95 billion Pound debt was written off. [ Schofield and Shaoul 1997, p. 7 ]

On the other hand, a World Bank paper argues that the reforms
* increased investment (in the six years after privatization the companies invested 17 billion Pound Sterling, compared to 9.3 billion Pound in the six years before privatization),
* brought about compliance with stringent drinking water standards and
* led to a higher quality of river water.

The World Bank paper agrees that tariffs and profits increased. [ [http://rru.worldbank.org/documents/publicpolicyjournal/115vdbrg.pdf Water privatization and regulation in England and Wales] , by Caroline van den Berg 1997 ]

There are also 16 mostly smaller water only companies in England that have been privately owned since the 19th century. In Scotland and Northern Ireland water and sewerage services remained public during the Thatcher years and until today.

ee also

*Water privatization
*Water supply and sanitation in the United Kingdom

ources

* Hall, David and Emanuele Lobina (PSIRU): UK Water privatisation - a briefing, February 2001
* Jenkinson, T. & Mayer, C. (1994) The Costs of Privatization in the UK and France, in Bishop, M., Kay, J. & Mayer, C. (eds.) Privatization & Economic Performance, pp. 290-298 (New York, Oxford University Press).
* Schofield, Richard and Jean Shaoul: Regulating the water industry. Swimming against the tide or going throught the motions? The Ecologist, Vol. 27, No. 1, January/February 1997

References