Water must reform or revert to public ownership, warns expert

“The most likely outcome from continuing with the status quo is that the industry ends up back in the public sector, as it is throughout much of Europe and in Scotland," according to regulatory expert, Professor Dieter Helm.

In a paper published last week Water – a new start, Helm warned: " After thirty years the great privatisation experiment may come to a gradual end.” He urged reform, repeating his earlier calls for the creation of a catchment system regulator, with competition for contracts auctioned to promote efficiency.

Helm argued that while public ownership would address some issues the sector is facing criticism for, including “financial engineering and the outrageous salaries and bonuses” it would not in itself solve the fundamental issues relating to water supply, wastewater systems and river pollution. Moreover: “A newly renationalised water industry would have to join the queue for state funding. The public financial controls on the EA’s flood defence spending do not auger well for longer-term investment.”