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A damning report should spell the end of England’s privatised water industry

The chief executive of the public regulator of private water companies in England and Wales (Ofwat) says the companies “have ‘created the perfect conditions for renationalization” as a result of their own actions. Writing in The Canary, James Aitchison says a damning report should spell the end of England's privatized water industry. “The report, by the University of Greenwich Public Services International Research Unit, compared the privatised English water industry with the public Scottish industry. It provides compelling proof that the privatized water industry in England is inefficient, unnecessarily overpriced, and benefits shareholders at the expense of consumers.” [The Privatised Water Industry in the UK: An ATM for Investors, by Karol Yearwood, September 2018]

Barcelona reorganises public services in the people's interest

Barcelona and Madrid are reorganizing public services by building upon a strong remunicipalization movement. David Hall of PSIRU offers a summary of the December conference. “A number of common features emerged during the day’s discussion. The first was that the new groups are approaching the question of remunicipalization systematically, based on explicit criteria. Secondly, public service workers are at the centre of the new policies—even though the parties and groups have no formal connection to the established trade unions. Thirdly, the process is being conducted with a high level of professionalism—legal, financial, and technical. (…) The direct employment of public service workers is inevitably central, for a number of reasons. The central reason for remunicipalization is to re-establish the capacity of a city council to carry out those services, which requires direct employment of the workers with the necessary professional and practical skills. This enables the city council to work with a group of people dedicated to public services, and so manage, develop, and change these services in the public interest. Ending the privatized contracts means that those employed by private companies need to be transferred to employment by the municipality.” See also the detailed presentation on “Strategic Approaches to Remunicipalization in Barcelona.”

Source: Transnational Institute

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The Privatised Water Industry in the UK. An ATM for investors

This paper aims to critically evaluate the privatised water & sewage industry in England. We find that the public-owned sector in Scotland delivers the service just as efficiently, albeit at a lower cost to consumers. Our econometric analysis suggests that the 40% increase in real household bills since privatisation was mainly driven by continuously growing interest payments on debt, contrary to the regulator attributing them to growing costs and investments. Finally, we show that the accelerating debt levels are primarily the result of disproportionate dividend pay-outs, which exceeded the privatised companies’ cash balances in all but one year since 1989. We conclude that the way the industry operates may no longer be sustainable and seems to disadvantage consumers greatly without their knowledge, as there is a fog of misleading statements by the companies and the regulator.

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