Ofwat’s director of price control Chris Walters has dismissed the notion that privatisation has failed water customers over the past three decades.
Speaking at the WWT Wastewater 2024 Conference, Walters refuted claims that public ownership could bring better outcomes for consumers.
Walters added that the sector would have failed to attract the levels of investment it has seen during the past 30 years if it had not been privatised.
Walters said: “I can’t see a state of the world where more money gets invested in water and wastewater if it was publicly owned.”
He added that ownership models that exist across the sector did not “obviously link” to the performance levels of different companies.
Walters shutdown the suggestion that investment would be attracted if water assets were publicly owned and managed.
He said: “I don’t know where the money would come from if the sector was renationalised,” and drew parallels with the under strain health service sector he previously worked in.
Last year, a YouGov poll indicated widespread support for bringing utilities back into public ownership, with only 8% of people favouring to current ownership model of water companies.
Media, public and political scrutiny of the water sector is anticipated to make water a hot issue heading into the next general election.
Labour has distanced itself from nationalisation of energy and water utilities as being against the party’s fiscal plans. The issue became a key debate topic in the 2019 general election after the party pledged to take energy and water back into public ownership as part its manifesto under former leader Jeremy Corbyn.
Perceptions that returns to investors are too generous have played a role in damaging trust in the industry with anger expressed that dividends have been paid to shareholders when performance has not always met customer expectations.
Walters said balancing the need for attractive returns with investment requirements was a topic Ofwat was beginning to take a longer term view on to balance the risk investors necessarily take on.
“We are not blind to the fact that the financial world has moved since the start of the price control process,” he said and added that the regulator was, for the first time, considering balancing that risk and return over 25 years rather than the five year cycles.