The Financial Times has levelled further swingeing criticism at the UK water sector and Ofwat in a new article which says that privatisation has failed and investment has only been achieved “at a heavy cost to consumers.”
In a viewpoint article published yesterday, the leading financial newspaper has accused the water sector regulator as being “ineffective at imposing efficiency improvements”, describing the requirement to increase efficiency by 1% a year as “unconscionably slack.”
According to the FT, inattention to governance has led to “a glaring lack of public accountability” as a result of endless restructuring of the English water utilities. “Six have been taken off the stock market and are now in the hands of international private equity investors and sovereign wealth funds”, the article says.
In the FT’s view, the government cannot continue along this path, saying:
“In any case, after almost three decades of trying, continuing to rely purely on economic regulation would be the triumph of hope over common sense.”
“A wise government would see the need for change and anticipate it. Otherwise this rent-seeking enterprise will be swept back into public hands.”
The new criticism follows hard on the heels of an article about water privatisation in the Financial Times on 10th September which was highly critical of Ofwat, the water companies and their investors.
Writing in response, Chief Executive Cathryn Ross, delivered a strong rebuttal to the UK’s leading financial news publication, saying the article had failed to recognise how Ofwat works to protect customers of monopoly water companies and that as the regulator, the customer’s interest is “central to everything we do.”
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