GIIA champions water investment in UK parliament
GIIA makes submission to House of Lords Industry & Regulators Committee inquiry into the role of Ofwat
In our latest submission to the UK’s influential parliamentary committee, we highlight challenges facing the UK water sector and measures needed to increase investment in the industry.
We flag that, though "investment in water has been markedly higher since privatisation", it is being held back by a "regulatory framework, which over recent years has systematically restricted rather than promoted investment." This "conscious decision to prioritise lower bills in the short term (lower than most European peers) rather than addressing long term requirements has stored up problems for the future."
The intervention follows our podcast episode with Water UK earlier in the summer, during which Chief Executive David Henderson explained how returns in the sector have fallen as bill increases have failed to keep pace with delivery costs. “Had water bills merely risen with inflation since 2010,” David explains, “They would now be 20% higher” than they are today.
Our message to the committee is that investor confidence has reduced as a result of the regulatory approach taken over recent years, as evidenced by recent GIIA surveys of global investor sentiment. The submission goes on to urge the government to:
- Give Ofwat an explicit duty to promote investment
- Ensure the Environment Agency takes account of the economic consequences of requirements it places on companies
- Provide guidance to Ofwat to ensure it strikes the right balance between drawing funds from future and current bill-payers
Specialist infrastructure investment news outlet Inframation featured our submission in an article published last week.
The full submission can be downloaded from this page.