Yearwood, Karol (2018) The privatised water Industry in the UK. An ATM for investors. [Working Paper]

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Abstract

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 skyrocketing 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.

Item Type:	Working Paper
Uncontrolled Keywords:	Water, Privatisation
Subjects:	H Social Sciences > HD Industries. Land use. Labor
Faculty / School / Research Centre / Research Group:	Faculty of Business Faculty of Business > Centre for Work and Employment Research (CREW) > Public Services International Research Unit (PSIRU)
Related URLs:	Publisher
Last Modified:	05 Oct 2018 14:57
URI:	http://gala.gre.ac.uk/id/eprint/21097

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