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Bringing water into public ownership: costs and benefits

Bringing water into public ownership: costs and benefits

Hall, David and Bayliss, Kate (2017) Bringing water into public ownership: costs and benefits. Technical Report. Public Services International Research Unit (PSIRU), London.

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Abstract

"The water companies of England and Wales were privatised 28 years ago, with generous public subsidies. Since then the owners have invested no new shareholder equity, but extracted nearly all post-tax profit as dividends, and built up a growing pile of debt to finance investments. They have been allowed by the regulator, OFWAT, to increase prices by 40% above the general rate of inflation.

The paper estimates that public ownership would save at least £2.3bn per year from eliminating the payment of dividends (saving £1.8 billion per year) and reducing the cost of interest payments (a saving of at least £500 million.), representing a reduction of about £100 per year per household: a 25% cut in the average water bill. It also represents a clear return of over 10% even if compensation were as high as £20bn. - and UK law would allow a much lower figure to be determined by parliament."

Item Type: Monograph (Technical Report)
Additional Information: Updated version includes new Annexe G (26/05/2017)
Uncontrolled Keywords: Privatisation, Public ownership, Renationalisation
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Department of International Business & Economics
Faculty of Business > Public Services International Research Unit (PSIRU)
Last Modified: 01 Jun 2017 08:51
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/17277

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