John Hurdley, Partner at Bircham Dyson Bell LLP believes that The Secretary of State has played a careful hand and taken sensible measures with regard to the plan for managing and harnessing the increasingly scarce but vital resource of water - set out in the Water White Paper.
"The long-awaited White Paper on the Water Industry turned its back on some of the more radical reform ideas that had been advocated for the industry over recent years and, instead, concentrated on a raft of less contentious measures to improve sustainability, efficiency and affordability," explains John Hurdley.
"There are some very sensible suggested measures to take the industry forward on an evolutionary basis and that seems about right for an industry which is so fundamental to the life of the nation."
"Having regard to the sizeable capital expenditure the
industry always needs
to maintain, renew and expand its ageing infrastructure (£90b
since privatisation in 1989 and much more to come), the Government
has decided that seriously restructuring the industry by requiring
legal separation of its retail operations, is not the sort of
measure that investors with large amounts of cash in the industry
would take kindly too and the idea has been shelved.
"Increasing competition is not abandoned however and new freedoms to change supplier for all non-household customers, already well advanced, will be accelerated and the ability of new participants to enter the market will be facilitated and greatly encouraged."
"New ideas are to extend the wider freedoms to sewerage services as well as water and to get rid of the middleman, whoever he might be, by permitting suitable big users to supply themselves via 'self-supply' licences. With the right take-up, that could bring in some new big players with interesting new approaches, in support of the Government's commitment to encouraging innovation in the industry."
Sustainability receives a lot of attention too - hardly surprising in the light of the current threat of drought in the South-East, the wider implications of climate change and the impact of a growing population.
"The last part of the jigsaw is how to pay for it all. Keeping investors on side is key to this as there is clear recognition that the less stable the regulatory regime, the higher the cost of funding the industry. Having closed that particular stable door however, how are the unavoidable costs of the industry to be fairly administered?" asks John Hurdley.
"Those who pay their bills now pay £15 per year extra to cover the cost of those who will not or cannot. Having abandoned several years ago the long-established and only effective means of controlling this situation - disconnection, the resulting debt mountain is still being grappled with.
"Guidance on social tariffs is now a priority, as is also a think-tank on the broader issues of the problem but it will not easily go away, particularly in current straightened times.
"The Secretary of State has played a careful hand but there is still much to do and the momentum for evolutionary change needs to be maintained."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.