Saturday, 7 April 2012

Private vs Public Water



'For what we're about to receive may the Lord make us truly thankful'.  Whether you believe in God or not, I doubt if there are many who don't think, every now and then, how lucky we are to have clean drinking water throughout the UK.

Scotland is more fortunate than other parts of the UK because present and past Scottish governments have refused to consider privatising water and insist that it will stay in public hands. In the past decade there have been plenty calls from various sources, including the Tory party, to privatise the asset in order to raise a few £billion to 'prop up jobs and services in other parts of the public sector but thankfully the majority of MSPs have been far-sighted enough to understand the public want water to be in public hands. To suggest selling Scottish Water is a definite vote loser and I doubt if it will ever be considered for sale in the coming years.

In an independent Scotland it will be more important to hold onto such a valuable asset, particularly when there is evidence showing the English are being ripped off by their private water companies.

All English water companies have foreign owners, ensuring that profits go out of the UK.  Meanwhile, Scottish Water (International) hires its expertise to foreign companies, ensuring the fees involved are ploughed back into the company.

Once again this year Scottish Water has frozen its charges - for the fourth year running. The average annual household charge from this month will remain at £324 - the same level it was in 2009-10.  SW said the freeze ensured its customers continued to get 'real value for money'.

In my 20+ years back in Scotland I've never experienced a hosepipe ban, I don't have a water meter fitted and my drinking water is superior to any bottled water I can buy.  I respect water and do my best to use it wisely, but I do have sympathy with so many parts of England where it is now rationed, because customers are still required to pay for a reduced service. That doesn't seem right to me.

Scottish Water is a success in public ownership and will continue to offer Scots a quality product at a fair price for years to come. Meantime, the price of water in England will continue to rise and the service will drift between poor and excellent. That's the difference between a well-run public business and splitting a utility such as water into several private companies.

38 comments:

Joe Public said...

The one minor difference between Scotland & England is that more of the wet stuff falls out of the sky north of the border.

This helps explain why southerners have hosepipe bans.

Public or private water companies have no effect on that phenomenon.

RMcGeddon said...

I noticed that the water companies down south are being allowed to explain away the problem due to the dry winters caused by 'climate change'. And the media and public are happy to accept this rubbish.
No mention of the hundreds of millions of pounds diverted from infrastructure repairs to bonuses and share dividends.
The 30% lost through leaks. Leaks that have increased since privatisation.
The lack of investment to increase the water available to match the rise in population of 12% since privatisation through mass immigration into the south east. Even without the dry winters they would be 12% short in the required supply.
That new desalination plant being opened yesterday in the south east should be the monument to the folly of water privatisation.
It epitomises the greed and incompetence of the private water companies. Unable to stem the leaks or build a proper water infrastructure in one of the wettest countries in the world and greedily filling their pockets with millions of private citizens money.

tris said...

I agree with every word.

If ever there was a privatisation crime in England, it was this.

Initially when people had water meters some poorer people didn't flush toilets, washed dishes in dirty water, and reduced bathing, all with horrific consequences.

In some areas a standard charge was then introduced, and whilst no one much minded paying standard charges to public organisations, they did very much to private companies. it was like saying that Tesco could charge you £100 a week for your groceries whether or not you bought anything. I remember how angry some of my friends were that they had to boost the profits of Thames Water, or Yorkshire Water, by paying them while they were abroad on holiday.

I don't know what system they use now, but surely, even in a UK which has become a haven for the greedy and the money grubbing the absolute most basic need we all have should be provided without some fat cats making a profit.

Thank heavens for sensible governments in Edinburgh.

subrosa said...

I would disagree with you Joe. Having lived in many areas of England, I would say the rainfall here on the east of Scotland is comparable with many areas south of the border.

The problem England has is the population densities and the fact the ancient pipework hasn't been replaced to the extent that was promised by the privateers.

I doubt if we've had more than two full days rainfall in the past three months Joe, so it can't be just rainfall.

Apogee said...

There will come a time when the system will approach collapse, and it will not be too long. This problem is of long standing, like from the fifties in the last century, and nothing has been done to rectify it.
It is not so much lack of rainfall, its too great a population coupled with abysmal maintaining of the system, even before privatization.
So which company will be the first for a subsidy? And what will the government do when the system collapses? And who will be expected to pay?

subrosa said...

Can't disagree with you at all RM because that's exactly what my friends in the south say. They've had far more leaks in the past 10 years than they had in the previous 30. Also, the time taken for any action seems to be days rather than hours.

subrosa said...

We are fortunate Tris. Sad, isn't it, that we should be grateful for sensible government decisions. Just shows how many aren't sensible.

The English don't deserve this but they don't make much protest. I can't understand that.

Crinkly & Ragged Arsed Philosophers said...

Let them bathe in champagne.

As it is I already pay more for water than I spend on whisky.

Oldrightie said...

Apogee has it to a tee. As does the post. Privatisation to subsidise public service jobs and the votes that go with them.
In fairness, before Labour's disastrous reign, possible from their Scottish power base, privatisation worked far more fairly.
That notwithstanding, the idea that rainfall should be used for the profit of corporate greed is horrendous.

Joe Public said...

All regions have drier or wetter areas, but Scotland has more mm rain per sq mile than England.

It follows that a distributor in a rainy area can be more wasteful of its product via unrepaired leaks without tangibly affecting its customers, than one in a drier area.

http://www.british-towns.net/weather/annual_precipitation.asp

Brian said...

Why can England not adopt the Dutch water supply model? It has public ownership and control at very local level and work is contracted out to private companies to obtain greater efficiency.
The reason: spivvy speculators can't make money from it.
One simple regulation that dividends could not exceed the interest on long-term gilts would solve the disgraceful situation.

Edward Spalton said...

Don't kid yourselves that public monopolies are necessarily benign.
In the days of the old Water Boards I was on my travels to the animal feedingstuffs industry and stopped for lunch at a pub.

Another chap, a bit younger than I, was doing the same and we fell to talking. He worked for the Water Board and it had a big problem. It's budget was underspent and he was visiting all their stores to see what space they had, so that they could order in unnecessary amounts of spares etc to make sure that their budget was all spent by the end of the year.

The importance of the people running the publicly owned Water Boards on relatively moderate but adequate salaries was judged by the number of employees they had in their fiefdoms - many of whom were not really necessary, just like the spares in the stores.

So when privatisation came, they suddenly turned into financial tigers, able to create profits by getting rid of superfluous people and running down unnecessary levels of stock. And, by golly, their salaries rocketed skywards!

The trouble is that any producer monopoly (whether water, public education, health or whatever) tends to be run for the benefit of the producers at the expense of the consumers, who have nowhere else to go. Water is a natural monopoly - and I always thought its privatisation was ridiculous.

It ought to be possible to run a decent,frugal, public monopoly - like the penny post when it was introduced . But in UK terms they always end up as a conspiracy between the managers and the unions against the consumers. I don't think it would be any different in an EU-subservient Scotland.

I rather agree with Brian about the Dutch system - but the Dutch know where the sea level is and they have an urgent, common motive for keeping water out as well as providing it for drinking. I suspect that this creates a rather more focused civic spirit.

tris said...

Mr S... Hello.

I worked for a private company whose departments did exactly the same. The works manager used all his budget at the end of the financial year, buying stuff that he might or might not need, because if he underspent the directors would take X% off his next budget, on the basis that he had a tendency to overestimate.

I reckon it's better to over-estimate your needs than to get to month 10 and be out of materials.

There's no doubt at all in this case that publicly owned water is far superior in Scotland to privately owned water in England. Yes we have more of the raw material but there are areas of northern England where it rains as much as it does in Southern Scotland...

cynicalHighlander said...

Thames Water is getting £4.1 billion to upgrade the London sewage system all at public expense so that those in the SE aren't hit with a £50 increase in their bills! Privatisation UK style.

Wast(e) Water

Water from the lake is pumped to the nearby Sellafield nuclear waste processing facility as a fresh water supply.[1] The NDA (Nuclear Decommissioning Authority) has taken over the licence once held by BNFL (British Nuclear Fuels plc) which allows them to extract a maximum of 18,184.4 m³ a day (over 4 million gallons) and 6,637,306 m³ a year from Wast Water to use on site for various processes including the cooling ponds and reprocessing (electricity production has ceased).

People will go thirsty or get irradiated by the waste from the electricity we used back in the 50's courtesy of the nuclear industry.

Barney Thomson said...

Whether it's "climate change" or some other reason, the fact is that there has not been as much rain as usual over the past few years in southern England.

I agree totally that a prime natural resource such as water should never have been passed into corporate hands and that the failure to maintain infrastructure (leaks) and the redirection of investment capital is indefensible. But water isn't just for drinking and power showers. River, lake and natural pond levels here are at their lowest for 15 years (yes, there have been droughts before). There is more to this problem than just mismanagement by the water companies.

And SR - it is not only the English that live in England.

subrosa said...

I'm not prepared to say if I spend more on sherry than water Crinkly. ;)

subrosa said...

Apogee, my thoughts exactly.

subrosa said...

I don't think rail privatisation was fair OR. We're still paying dearly for it.

subrosa said...

I suspect you're right Joe as the west coast certainly gets more than it's fair share of rain but is much more sparsely populated than parts of England.

subrosa said...

That would be an excellent solution Brian but no Westminster government would legislate for it because it would upset their pals.

subrosa said...

I don't think it would be any different either Edward, but lessons could be learned from Holland.

You're right about the changes though. Even though water is still public here there have been vast changes to staffing etc. There used to be a water board official for each town/area and he knew every stopcock there was. Now it can take days to find a stopcock because staff come from miles away and don't have a clue about the locality.

Also SW plans are over 30 years out of date as I know to my cost when I bought my house. They've still not been updated.

subrosa said...

That was kept out of the headlines CH.

subrosa said...

There's not been as much rain here either Barney but weather changes all the time and I don't believe it's 'climate change'.

Yes I know Barney, I suppose to be absolutely accurate I should have said 'the people who reside in England'. Apologies for not being sufficiently politically correct.

Crinkly & Ragged Arsed Philosophers said...

In the world of commerce there is little that can be classed as benign.

That said the myths of privatisation creating efficiency to the benefit of the consumer or that public ownership provides efficient cost/service ratios and results have both been proven unfit for purpose.

In the public model it is[was]the bureaucratic and political swamp that distorted and diverted any real management or commercial enterprise.

In the private model apply a monopoly with greed and all 'savings' become profit. This is exemplified by the demand for infrastructure development to be subsidised from the public purse. Purely and simply, this is privatising profit while raiding the public purse.

The solution as I see it is for the nation to own all resource and the necessary utilities. To set these up as companies run strictly on the lines of any other private company or corporation. Board of directors, audited accounts, liability for corporation tax etc, and all employees are employed by the company; only the sole shareholder is the government representing the people.

Let the people have the benefit through their society of dividends and taxes, while the board and its management are hired or fired based on their results.

Let them have their dog eat dog world it's just time the peoples dog started biting back.

The Last Of The Few said...

Sadly I have come to the table on this too late.

As you are aware TLOTF retired from his previous role and now works for well the main company in this post.

I regret Rosie you have a false and blinkered view.
Sw is an over charged huge leviathon of a beast.
it is groslly inefficient.
It gets a huge amount of EU and DWQR hand outs which is spends will fully upon the wrong rpject.
It has many many DWQR fines outstanding and its qulaity is below that of current standard in many areas (you are just too used to it)
It recently had to do a project in half its normal time in order to prevent a court case. This as you can imagine is a ahuge waste of taxpayers cash.
It answers to no one in terms for its remit and indeed in 2010 stcki piled cash for such a privatisation to make it look cash rich.
Its costfeezing is rouse as its money coms from ataxation levy and that levy is actually approx twice that of an English bill.
We may think we have a better service but we dont.
We pay twice the cash to a body that gets half if its money from a regulator.
It did plan to go priovate and mark my workds it will do !

Jo G said...

Currently the only Party at Holyrood who aren't in favour of privatisation is the Scottish National Party. The others want to privatise and that includes Labour. Shocking as this is it is the truth. Who would have thought that Labour, of all Parties, would wish to go such a route? So we aren't safe here. All it might take is a change of government in Scotland to send Scottish Water into private hands. And that's despite a Strathclyde-wide referendum on water just a few years back making the position of the people clear when 97% said NO to any privatisation of our water in Scotland.

Also, in England, 33% of water is lost to them through leaks in their pipes. Shouldn't they be keen to address this?

subrosa said...

LotF, I appreciate your input no matter how late.

I quite possibly have a false view and see it through rose-tinted spectacles as I see it from a consumer's viewpoint.

Doesn't it answer to the Scottish government or is nobody there interested?

So if it is privatised you're saying the levy would reduce - although surely prices will increase rapidly as they have done in England.

subrosa said...

Jo, LotF has inside information and he's sure it will be privatised in the future. I tend to agree with him as short-term gain is always the first thought of politicians.

Jo G said...

http://www.guardian.co.uk/commentisfree/2012/jan/31/renationalise-english-water

The above is an article from the Guardian from January of this year. It knocks a few myths on the head including the one that we pay more here. I hope its ok to post the link Subrosa.

I'm convinced the prospect of privatisation here would set off the same sort of public opposition as before.

Within a few short months every new private water company in England was in foreign (mostly French) hands. I prefer the idea of Scotland's water literally working for us rather than making obscene profits for shareholders as happened with domestic fuel.

Jo G said...

LOTF, not sure which project you're referring to but I do know Glasgow City Council recently threatened SW with legal action over a massive crater in Renfield Street when yet another drain had fallen in. Ironically the leader of that Council, Mr Mathieson, conveniently ignored the unbelievable pressures his own Council brings to bear on such drains through their insane decision to run most public transport down that very street, and Hope Street, all day and every day. That sort of traffic does tend to make drains give way.

The Last Of The Few said...

And a huge apology to everyone for my last post. My dyslexia was in full flow there and I did not have the background software switched on. ooops sorry. I hope you got my point though

Edward Spalton said...

Even when the main water undertakings were in public ownership, the area where I now live was supplied, and still is, by a private company - The South Staffordshire Waterworks Company. When we lived in Derby (Severn Trent) we often noticed that the water here (my parents'home) was better quality with less chlorine.

I have never looked into the history and accounts of the SSWC but such undertakings were usually under a special Act of Parliament which placed limits on dividends. A similar sort of case, the old Derby Canal Company, had a limit of 5% - quite a good yield when government stocks were 2-3% and the currency was gold sovereigns - but unattractive when the currency is being deliberately debauched, as it is today.

There is no reason why a privately owned monopoly cannot be just as well regulated as a public one. Without the discipline of earning return on capital, public monopolies tend to become rip-offs in the interests of a conspiracy between unionised work forces and managers.

Both public and private organisations these days are subject to the curse of over-rewarded management. I had a little book for an Easter present which includes this quote from Malcolm Forbes "It is unfortunate that we can't buy many business executives for what they are worth and sell them for what they think they are worth".

And so say all of us! (I think)

nominedeus said...

The privatisation drive has only served to beggar the little people whilst allowing the govt. of the day a little cash leeway..everything privatised has been undersold and I for one am very P****d off about it!

subrosa said...

Of course it's ok to post links here Jo. More information for everyone. :)

subrosa said...

Edward, I agree there's no reason why a private utility company can't be as well regulated as a public one, but that doesn't happen it today's government. For the reasons you state.

subrosa said...

Me too nominedeus. I've never quite recovered from the mess of the railways. Even today I find it difficult to read a railway timetable.

Jo G said...

I think we shall all never recover from the privatisation of domestic fuel. We should not forget either what that brought for many: the choice between heat or food as private companies held us all to ransom. We simply cannot allow the same to happen with our water in Scotland.

Scottish Water is not perfect and we should want to improve its performance but we don't have to sell it into the private sector to do that. Our water doesn't just fill taps, it has other skills too and the power of it can deliver more than that, like energy that brings domestic fuel. I hope if it is threatened again that we shall see the same opposition as we did in that Strathclyde wide referendum in recent years. I personally believe it is one of the few assets we have left.

subrosa said...

You're right Jo but unfortunately I think LotF is too and it will be sold.

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