"It makes financial sense at this point to bring this industry back into state control so that all of the money can go towards fixing the problems."

Private companies’ disastrous handling of our water system has been rising up the agenda in recent months. From leaky infrastructure to sewage polluting rivers and seas, the performance of the private water companies has come under increasing levels of scrutiny.

The issue was discussed in depth on the latest episode of BBC Question Time, broadcast from the Sussex town of Bexhill. Defenders of the private water companies were few and far between on the show.

But while some panellists and audience members called for tighter regulation of these companies, Novara Media’s Ash Sarkar took things a step further. She made the case that the private water companies should be brought into public ownership.

Speaking on the panel, Sarkar said: “Privatised water companies paid out £1.4bn in shareholder dividends last year […] and 20% of your water bill is going towards shareholder profits and managing the debt for those privatised companies.”

She then asked the audience: “Does that seem like a good use of your money?” The answer was a resounding no. “Do you feel you’re getting good value for your money?” Again the answer came back loud and clear as ‘no’. And finally, she asked: “Would you rather that money was going into fixing the infrastructure?” That question got a positive response.

Following this, Sarkar went on to explain why privatisation of the water system is fundamentally flawed. She told the audience: “While these companies remain in private hands, there’s no incentive for them to do it. There is simply no incentive.

“So Southern Water is mostly owned by an Australian investment firm and is partially owned by the American mega bank JP Morgan. So your water bills are going towards making foreign corporations rich, and because they are so fabulously rich, they can just eat up whatever fine the government decides to levy them with.

“And while it would be very satisfying to see some of these CEOs in jail – and I would love it personally – what I fear is that the incentive hasn’t gone away, which is you under invest in the infrastructure, you let it crumble, because – you know – you don’t live there, you live in Manhattan or somewhere gorgeous. You don’t have to worry about the sea in Bexhill. And instead the incentive is to extract money from the system that could go towards fixing infrastructure, and you put it towards shareholder dividends.”

She then went on to say that the solution to the problems facing the water system is to take the industry into public ownership. She said: “It makes financial sense at this point to bring this industry back into state control so that all of the money can go towards fixing the problems.”

Sarkar wasn’t the only person to make this point during the show.

One member of the audience said to huge applause: “Since the water companies have been privatised, it’s got worse hasn’t it? Let’s be completely honest. They don’t fix the leaks. They don’t fix the sewage. Why don’t any of the political parties talk about nationalising these utilities?”

Retired reverend Richard Coles was also on the panel this week and he too railed against the performance of private water companies. While he said he wasn’t ‘ideological’ about privatisation, he nonetheless criticised the record of privatised water.

He said: “Since privatisation, the water companies have raised 50 billion quid in debt. And where’s that gone to? It’s not gone on infrastructure. It’s gone on maximising shareholder and stakeholder return.”

He then went on to say: “I live between Eastbourne and Seaford and I moved here because it’s a very very beautiful part of the world to live in and we’re extremely fortunate to live here. But I would not swim in the sea and I would not go and paddle in the stream that runs through my village. And it’s a disgrace. And it’s symptomatic of something greater.

He concluded on the state of privatised public services: “Our infrastructure is decaying, our roads are undriveable, our trains don’t work, our rivers are filthy, our seas are filthy – we need to rethink the way we fund this stuff.”

Following the show, anti-privatisation group We Own It said regulation of the water industry has “demonstrably failed”. The group’s director Cat Hobbs told Left Foot Forward: “Our water bills are going up, but where’s the money going? Shareholders are pocketing a staggering £1.6bn a year on average in dividends, while our infrastructure crumbles.

“If we really want to tackle sewage pollution, we need to bring our water into public ownership, so money can be reinvested in our infrastructure, not dished out in dividends and CEO salaries. 

“Regulation has demonstrably failed to prevent pollution for the last 30 years. It’s time to run our water system for people and planet, not private profit.”

Chris Jarvis is head of strategy and development at Left Foot Forward

Image credit: BBC Screengrab

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