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Renationalisation of water industry won’t wash away problems – The TaxPayers’ Alliance – 19.08.22

By Joanna Marchong

Following weeks of dry weather across the country, many water companies have issued hosepipe bans and encouraged consumers to conserve supplies. A lot of media attention has been focused on the amount of water lost to leaks by water providers. As Robert Colvile rightly wrote recently, “The reason that just over 20% of Britain’s water is lost to leaks is because that is the level set by the regulator.”

There’s not necessarily an obvious incentive for providers to improve upon this. But many pundits (particularly The Guardian newspaper) have laid the blame on the fact that water companies are privatised. Their answer is renationalisation. But is public ownership of the water industry a viable solution?

In England and Wales there are 25 water companies that are privately owned. Compare this to Scotland, where Scottish Water is wholly under public ownership. So who has performed best when it comes to leakage?

In 2020-21 Scottish Water lost 463 megalitres (ML) per day (1 megalitre = 1 million litres). Let’s see how that compares to English and Welsh companies:

Only Thames Water lost more water to leakages at 635.6 ML per day. But this doesn’t tell the full story as the industry regulator Ofwat deemed this performance as “Average” in their Service delivery report from November 2021. How can that be? Well you have to consider the proportion of water leaked compared to total supply.

Rather annoyingly this data isn’t easily available - even the regulator couldn’t supply me with information on leakage as a percentage of water put into supply. But using all the available data from the latest set of water companies’ annual reports from 2021-22, we’ve managed to create a better picture of how they shape up.

As you can see, Scottish Water is losing 30.2 per cent of its total water supply compared to Thames Water at 24.22 per cent. Indeed most companies (of the ones we were able to source data for) in England operate leakage loss of less than 20 per cent. It’s also worth noting that Northern Ireland Water is publicly owned and performing worse than its English counterparts.

In simple terms - based on this limited data - nationalised companies seem to be performing worse than their privatised counterparts in terms of leakage.

Now it’s not all bad news for the publicly-owned companies. A recent report from Water UK states: “Scotland has reduced its level of leakage by 60% from 2005 to 2020” and “It appears Scottish Water has outperformed England and Wales based on this measure.”

For the full report in pdf with more images, please click on this link:

Renationalisation of water industry won’t wash away problems - by Joanna Marchong for the
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