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As the article mentions, privatised water companies have built no new reservoir capacity and relied on drawing from rivers and other sources. What the article

As the article mentions, privatised water companies have built no new reservoir capacity and relied on drawing from rivers and other sources. What the article doesn’t mention is that pre-privatisation a new reservoir was built every year up to about 1960 and then every few years until privatisation in 1992. So we are about 30 years behind in adding capacity to the system. This combined with the inadequate levels of investment in the system leading to enormous wastage, is the answer. Water should never have been privatised. At least not without a framework for a national strategy for water. I suspect that wasn’t done because it would have made water companies and unattractive source of profit.

atoav 1y ago
Privatization just means that if you were interested in the outcome before (having water), they are now interested in the money that can be extracted from it. And that means their interest is to but a modern branding onto an operation that has been stripped for wires as long as it works. I grew up during a privatization wave in my country and the promise of the proponents always was that private ownership means waste is cut. Now all these sectors that produced decent services before have gone to shit. Be it postal, trains, highways, whatever. Everything is broken, underfunded, services less people for more money. 10 years ago when I said the same thing I would get a lot of counter arguments that all boiled down to: "Trust it bro" or "But governmental is more waste". Now these arguments don't come up nearly as much. Everybody can see it. The thing is, if you want to avoid waste then literally the best strategy is to go into a desert where there is no service. No service means no waste. But it also means no service.
- fragmede 1y ago
  Waste and inefficiency should be stomped out, but it doesn't need to be ground down into a fine dust and then vaporized into nothingness. A little bit of waste is fine. You want slack in your system in case of emergencies.
  - atoav 1y ago
    The problem with that attitude is that waste isn't that easy to define: - what is waste during good times may be essential during bad ones. If your service utilizes 100% CPU during normal operation (no waste), it has zero slack for changes in the environment. - what is waste for a manager, may be an essential service to the persons using it. So maybe that cell tower in a remote area may be operating at a loss, because few people live there, but to them it is essential (or to you, if you break your ankle during a hike). Privatized services don't have the goal of covering people, but earning money. Covering people may be a side effect, but it isn't necessarily the goal - cutting waste can make the service less attractive as a whole and make it enter a downward spiral. E.g. if you cut all non-profitable lines in a public transport system your public transport system becomes less usable as a whole, as people now have a harder time fetting where they want to go. That leads to less people using it. That in turn leads to you having to cut more lines, which in turn... You get the idea. No service means no waste, any service has/to have waste - some waste appears like waste because managers don't understand why it is there. Essentially a Chesterton's fence-type of situation. Like with the OceanGate submarine implosion, that essentially happened because the late owner of the company decided that all these lengthy certification processes the submersible industry had written in blood were waste and could be skipped. He didn't posses the expertise to know why it was there in the first place, so it was waste. With some services the goal isn't (or shouldn't be) to do "something" as cheaply as possible while extracting value, with some services the goal ought to be to provide the service in a sustainable fashion to everybody ad infinitum, while trying not to waste more money than is necessary and creating budgetary timebombs for future administrations/generations/managers. Those are entirely different incentives, leading to entirely different results. And depending on which service we talk about the reasonability of chosing one over the other may differ. That being said, there can be real waste to cut. But cutting everything based on suspicion is very expensive in the long run.
- TheOtherHobbes 1y ago
  The "waste" argument is standard neoliberal nonsense. There are very few situations where the private sector provides a better service for less money. (See also the UK's NHS, which still provides a very efficient - if increasingly broken - service, while being starved of cash.) Like most neoliberal nonsense, it's not just a lie, it's a misdirection. What it really means is "Government money is being spent on providing a service for poor people, when it should be handed out to rich people." It's driven by entitlement, not generosity. You can see this very clearly in the way privatised CEOs are paid. The water companies quite obviously and literally prioritise CEO pay rises and dividends over service quality. That's not an accident. It's the true meaning of privatisation. That is what privatisation is. The "customer" in privatised industries isn't the public, it's upper management and other big shareholders.
  - ForHackernews 1y ago
    Is the NHS "starved for money"? I don't disagree that it's verging on collapse, but they keep giving it more and more money. The budget goes up, both in real terms and as a percentage of GDP: https://commonslibrary.parliament.uk/research-briefings/sn00724/ https://commonslibrary.parliament.uk/research-briefings/sn00... How much would be enough? 15% of GDP, 20%, 50%? I'm generally in favour of public services over ruthless privatization but I don't understand how Britain is to survive as a nation of nurses and pensioners supported by a tax base of Uber Eats riders.
  - billy99k 1y ago
    "There are very few situations where the private sector provides a better service for less money" The issue is when there is a monopoly. When you have a government monopoly of a specific industry, it's going to be poor. If the same thing happens in private industry, it's a similar outcome. There is no competition with the government, because they play by rules that makes it impossible to compete as a private business, so it's by default, a monopoly. When companies compete, it's always better for the customer. Government run Internet (which is what we had before it was commercialized), was stuck in the same place for decades, with no innovation. It's pretty much universal and relatively cheap now. In the US, you can look at the post office and private companies like UPS and Fedex. I used to run a business for almost a decade where I would ship out 100s of packages/week. The post office always had poor service compared to the rest...and the cost ended up being comparable. If you lost a package? with the post office, there was no real way to get your money back. There's waste with government-run services because they never have to really worry about profit or losing money. Every government-run service I've ever used has been inefficient.
autoexec 1y ago
When it comes to things like utilities every penny of profit comes at the expense of the public. Either prices are raised so that a small number of people can stuff their pockets with extra cash above what it costs to deliver the service and maintain the system or they get that extra money by failing to deliver the service or they do it by failing to maintain the system itself. I think the neglect and failure to invest in infrastructure is the worst because unlike high bills or increasing numbers of people not being served it's more or less invisible to the public while companies and shareholders rake in a lot of money, but doing that causes problems tax payers end up footing the bill for down the road, and it may not always be obvious to the public what the cause was. A power company who makes profit by neglecting the condition of their power lines can cause a wild fire, but it takes a lot of time, taxpayer money, and luck to identify that the lines were the source of the fire, to discover that the company knew (or should have known) about the problem and done something about it, to get enough proof of those things that a lawsuit is possible, and to fight it out in court in order to hold the company accountable. It's not just the cost of fire the public is on the hook for in that case, but the costs of everything else too.
- krona 1y ago
  > I think the neglect and failure to invest in infrastructure is the worst Cumulative capital investment by water companies in England and Wales since privatisation: £250bn. The infrastructure they inherited was never designed for the things it's being asked to do today, and it has a life expectancy. It would literally cost trillions to upgrade the entire sewerage system. This isn't apologia, it's just reality. The road network will also face the same fate since much of it was built >50 years ago and has a life expectancy of roughly 50 years. The country simply can't afford to replace it.
  - another-dave 1y ago
    I mean, all the more reason it shouldn't be privatised. If it only makes sense to have one of something (road network, water system) it's a natural monopoly, _and_ it's going to require large public investment to be maintained, why wouldn't you in-house the expertise needed to do that and avoid the shareholder dividends overhead?
braza 1y ago
> Water should never have been privatised. At least not without a framework for a national strategy for water. But one can make a very fair argument where you can have a strong regulatory framework to ensure investment goals, exit clauses, and penalties in case of missing goals, no?
- elAhmo 1y ago
  Yes, but that would make private investment in utilities not attractive as the profits would be low or non existent. Competing forces
- rlpb 1y ago
  That never happens because the appointed regulator has no incentive to efficiently and effectively regulate, either.
  - kolektiv 1y ago
    Particularly when, as in the case of UK water privatisation, there's a fairly convenient revolving door between the supposed regulator and the privatised water companies. Poacher turned entirely ineffective and rather friendly gamekeeper...
    - arethuza 1y ago
      Nitpick - English water privatisation, I don't think the rest of the UK has private water companies - we certainly don't here in Scotland. Scottish Water is controlled by the Scottish Government.
      - kolektiv 1y ago
        You're absolutely right, English - my family north of the border are no doubt cursing me as we speak, I'll go and replace the cone as penance next time I'm there.
      - burtness 1y ago
        *England and Wales
tome 1y ago
> privatised water companies have built no new reservoir capacity and relied on drawing from rivers and other sources Why does privatisation mean that the government can't build infrastructure? I think the answer is more likely nimbyism than privatisation. I personally think it makes no sense to privatise infrastructure for which no competition can reasonably take place, and I'd include distribution networks of many sorts in that: water distribution, rail lines, electricity distribution. But I'm not aware that privatisation means that the state can't take on reservoir projects. The problem is that development of all kinds in the UK is utterly crippled by nimbyism. The article mentions the proposed Abingdon reservoir but links it to the boogyman of data centres rather than call out what the picture obviously shows: it's being stalled by nimbys.
- PaulRobinson 1y ago
  "Privatisation" does not preclude government investment in infrastructure. "Thatcherism" does, however. It is a warped [Ayn] Randian view of capitalism and those who drive it. State intervention into the machinery of capital, even when it comes to essential infrastructure, is considered a corrupting influence. Nobody able to change national policy within Downing Street or even ministries in Whitehall, at the time - or since - has had the gumption to say it's not working and we need to do something about it. You are however right, that NIMBYism has also worked remarkably well - the planning process in the UK is the reason we can't build HS2 cheaply or quickly, and that is relatively painless compared to wind farms, solar farms (also often blocked), never mind building a dam and flooding an entire valley, which was the old way of creating new capacity.
  - tome 1y ago
    > Nobody able to change national policy within Downing Street or even ministries in Whitehall, at the time - or since - has had the gumption to say it's not working and we need to do something about it. Thatcher's been dead for 12 years and out of power for 35, so I'm not sure why it should take much gumption. All it needs is national leaders who believe in the flourishing of the country, and that that requires infrastructure development, not just banks, software and scientific research. Unfortunately I don't see any such leader on the horizon.
seanalltogether 1y ago
The concept of reservoirs and emergency supply seems to be completely at odds with privatisation. What private company is going to spend loads of money to build deep reservoirs that are stressed only once every 5 or 10 years. None. They're going to reach for an immediate supply like a river or aquifer and then raise prices if those sources run low. It's insane to plan out infrastructure on the belief that private companies are capable of building such large buffers.
- tome 1y ago
  I'm inclined to agree that privatisation is bad for long term planning, but the history of the Abingdon Reservoir proposal seems to be counter evidence: https://en.wikipedia.org/wiki/Abingdon_Reservoir https://en.wikipedia.org/wiki/Abingdon_Reservoir Looks like Thames Water (a private company) proposed the development nearly 20 years ago, but it was turned down by the Environment Agency, a government body. > Plans for a £1bn reservoir in Oxfordshire to supply more than eight million people over the next 25 years have been rejected by the government. > Thames Water wants to build a site on four square miles of land near Abingdon to help ensure future demand is met. > The bid went to a public inquiry but the secretary of state said there was "no immediate need" for such a site. "Abingdon £1bn reservoir plan rejected by government" https://www.bbc.co.uk/news/uk-england-oxfordshire-12651131 https://www.bbc.co.uk/news/uk-england-oxfordshire-12651131
  - blitzar 1y ago
    > Thames Water's computer-generated image of how the reservoir would look We have come a long way in computer generated images in 14 years.
  - zarzavat 1y ago
    Good find, I admit I had jumped on the Thames Water is Evil bandwagon, and for the record they are evil, but in this case they have been out-eviled by that other driver of British societal regression: > Campaigners had fought the plan, claiming there was no need for such a large reservoir and that it would damage the environment. > Leader of the Vale of White Horse Council Tony de Vere said: "We are delighted with this decision. > "Local residents were very worried about the impact of such a large reservoir and we share their relief that the plan has been axed."
komali2 1y ago
I was fascinated on my recent trip to the UK to learn how much of their infrastructure they'd privatized semi-recently. Trains, hm, well it kinda works in Japan so maybe not so bad, but, water and SEWAGE??? In what universe does it make sense to have one of the most critical infrastructure systems, the backbone of health for a city, participate in a marketplace? Insanity. Not to mention the fact that at the end of the day only a government could possibly have the ability and authority and budget to run new lines or the motivation to do maintenance. What's next, pay per poop?
- octo888 1y ago
  It makes perfect sense. The capitalists can constrain the supply, push up prices. And we Brits don't revolt – even protesting is highly legally-risky these days. Is there a better country to do such things? I don't think so
  - ahazred8ta 1y ago
    "Careful Now." "Down With This Sort of Thing." "Unmutual."
- adornKey 1y ago
  More likely they'll hand out laxatives and ask people to help solve some fertilization crisis out there in the fields... And there'll be commercials - Scotland - Heavy rain (horizontal) - A woman totally drenched (with baby in hands) - In panic - Warning about the impending water crisis.
- jplrssn 1y ago
  It’s ironic that after British Rail was privatized, many UK rail services ended up being run by subsidiaries of other European state railways: French SNCF, Dutch NS, Italian Trenitalia, and so on. Turns out the state knows something about running trains after all.
  - arethuza 1y ago
    For a while Abellio ran rail services in Scotland - they were absolutely awful and things got a lot better almost immediately the Scottish Government terminated their franchise.
graemep 1y ago
> Water should never have been privatised. At least not without a framework for a national strategy for water. State ownership is not a panacea either. State owned Scottish Water has more sewer leaks than the privatised companies in England and Wales do.
- bilekas 1y ago
  The responsibility to look after the citizens basic needs such as water is on the government. Not private for-profit companies. If they can't do their job, then we shouldn't pay our taxes ?
  - dukeyukey 1y ago
    You could say the same argument about food, but the system of privately owned farms moving food via privately owned logistics companies to privately owned grocery shops works very well. Yes, it's the responsibility of the state that it's citizens can acquire their needs, but that doesn't mean it has to be government owned.
    - graemep 1y ago
      The difference being that farmers and logistics companies and shops work in a competitive market where as water in a natural monopoly. The system does not work perfectly though. In the UK big supermarkets have monopsony power over farmers and smaller farmers are being squeezed out by big farm owners (who tend to have lower standards, especially of animal welfare).
    - bilekas 1y ago
      > Yes, it's the responsibility of the state that it's citizens can acquire their needs, but that doesn't mean it has to be government owned. Absolutely agree, it may not need to be government owned, however it should absolutely be government funded.
    - Ericson2314 1y ago
      Giving how much subsidies farmers get, and they still whine all the fucking time, I would gladly nationalize them all. Corn ethanal? Gone. Crazy EU stuff? Gone.
deleted 1y ago
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davej 1y ago
Here in Ireland, our water is a public service and we have similar supply issues to the UK (and a similar rainy climate). I'm not discounting your analysis and I'm sure there are lots of other variables but it's always good to compare other outcomes when discussing counterfactuals.
- sandbags 1y ago
  It's a fair point that nationalised water industries can also be poorly run. But I'm not sure what the argument is that means the amount of money that privatised UK water companies have paid in dividends vs. invested in maintaining and expanding infrastructure isn't a significant part of the UK's problems. However, as a further point. If national priorities change then a nationalised water industry can respond (relatively) quickly. But what can be done with a bunch of potentially foreign owned profit-seeking companies?
  - qcnguy 1y ago
    Paying dividends is good. It's how you attract the capital for investment without having to raise it via sale of government bonds or money printing. The problem here is financial illiteracy - the alternative to paying dividends isn't that the same money all gets spent on the water network. Large scale investment is rarely funded from general revenues as it'd require spending years accumulating a huge cash pile that sits around doing nothing, and governments see such piles as pigs to slaughter. So the alternative is that the government borrows the money and then has to pay interest on it. From your perspective the UK "wastes" 8% of its spending on interest payments, and it's rising rapidly, but of course if it didn't pay interest then nobody would lend it money and all funds would have to either come from taxes or via inflation.
    - KoolKat23 1y ago
      Government bonds are considered lower risk and the interest rate is lower, i.e they will attract the same money for less. Private shareholders are more expensive. This also doesn't consider "debt recapitalisation" where these private companies draw down new debt on promise of future cash inflows from consumers and then suck out dividend cash "de-risking" their holding in the company. The government can bail it out or the can close it then, it's not their problem as they received the cash upfront.
mhh__ 1y ago
You're not taking into account how hard it is to get regulatory/planning approval to build anything in Britain.
hopelite 1y ago
How can we just ignore the elephant in the room; that not only has the UK population risen by almost a 1/3 since 1960, but the nature of that population has also been changed since that time, regardless of how one feels about it. The UK (as only one example) is simply not the same thing as it was in 1960. Why would we expect the same results as if it’s just a matter of catching up from being behind, all while the ability to do so has changed? If the UK wasn’t able to keep up with water storage capacity between 1960–1989, and has not built any capacity whatsoever since 1989; what makes one believe that somehow the UK, with massive headwinds blowing right into its face, could not only maintain the current capacity but expand it by about 50% (pop growth plus backlog), at the same time that the population has increased by ~1/3 and the nature of the people in the UK has changed significantly from a people that was able to do that in the past, but clearly could not do so since 1960, and while the finances of the country are inverting? It is a gamblers fallacy. It is the aging man who still thinks he is in his prime, but also after decades of neglect and abuse of his body on advice of a devil on his shoulder, the serpent whispering assurances in his ear to indulge in harmful things and to win back his loses.
- Earw0rm 1y ago
  I'm curious what you mean about the nature of the population? Age? Ethnic makeup? Urbanisation? The population is older, less white, more in cities, fewer kids, but I'm not sure what any of that has to do with our water consumption or ability to build for it - other than maybe older people, especially the ones that moved out of the cities to live some LOTR-inspired faux-rural lifestyle, tend to be more NIMBY? But equally though our appliances and lifestyles aren't the same as 1960. Showers are massively more efficient than baths, but we use them daily instead of once a week. Industry has mostly disappeared, and thermal power stations are on the way out (both extremely heavy water users), but agriculture has become more intensive.
8fingerlouie 1y ago
It's fine. Water companies will build new resevoir capacity, but since the extra money they already bill your for, for maintaining the infrastructure, has been paid out to shareholders, it will of course require an additional fee on your bill. At least that has been my experience with everything privatized in the past couple of decades. The private investors scoop up every bit of value, and when it's time to pay the bill, it's the customers that must pay (again). Fortunately we have regulations in place, but that doesn't help when all value has been siphoned from the company and all there's left is debt.
epanchin 1y ago
The Town and Country Planning Act 1990. Responsible for putting a pin in development and turning Britain into a museum, with insufficient water or power. It should urgently be reformed.
bargainbin 1y ago
It shouldn’t be considered a source of profit at all, attractive or not. Water is a fundamental resource for human life. We pay bills to ensure the infrastructure is there to provide it. If the infrastructure isn’t there, we haven’t received what we paid for. Worse, without EU regulation these companies are now blasting sewage into lakes and rivers. Ofwat can’t do anything. At this point I feel there’s no solution other than nationalising the infrastructure again and ploughing billions of tax payers money into yet another failed Thatcher initiative. Of course that will never happen, because we’ve not had a government willing to make sweeping changes like that since Thatcher. Except maybe Liz Truss with her exceptional grasp of economics.
jmyeet 1y ago
So... because capitalism. People have this propagandized view that the "free market" (which isn't real) is responsible for innovation. All capitalism does is build enclosures and engage in rent-seeking. With the tendency for profits to decrease, ultimately it comes down to cutting costs and raising prices. So why would a water company invest in a new reservoir? That increases supply. That might lower prices. The UK is going to neoliberal all the way into being a developing nation.
- oceanplexian 1y ago
  >People have this propagandized view that the "free market" (which isn't real) is responsible for innovation. In the last century and a half, we went from candle light and horse and buggy, to the lowest level of global poverty in the last 5,000 years of recorded human history. If capitalism wasn't responsible then what was?
  - jmyeet 1y ago
    China is almost solely responsible for the reduction in global extreme poverty [1]. [1]: https://www.worldbank.org/en/news/press-release/2022/04/01/lifting-800-million-people-out-of-poverty-new-report-looks-at-lessons-from-china-s-experience https://www.worldbank.org/en/news/press-release/2022/04/01/l...
    - gerdesj 1y ago
      Please expand your thesis.
otikik 1y ago
"Thanks, Thatcher"
ch4s3 1y ago
Someone down thread posted that the private company has proposed several new reservoirs starting in 1992 and they've all been blocked on environmental grounds by the government or by NIMBYs. For example the Abingdon Reservoir has been in planning for 19 years[1]. It is opposed by GARD[2], the Group Against Reservoir Development. It's hard to see how this is the fault of privatization. [1]https://en.wikipedia.org/wiki/Abingdon_Reservoir https://en.wikipedia.org/wiki/Abingdon_Reservoir [2] https://groupagainstreservoirdevelopment.org/ https://groupagainstreservoirdevelopment.org/
therobots927 1y ago
Thatcher would be proud. What a waste
manoDev 1y ago
Seems fitting, considering it’s the birthplace of liberalism.
vondur 1y ago
As a counter point, go look at the Los Angeles Department of Water and Power. It's a publicly owned municipal utility and is notorious for its corruption. The DWP doesn't perform any maintenance, lettings things break completely and then having to fix huge issues. They were the group who failed to fill a reservoir in the Pacific Palisades to save some money where firefighters weren't able to use to fight the fires.
- mock-possum 1y ago
  Ideally, the dwp is accountable to the city, and therefore to voters and the state, in a way that a private company profoundly is not.
Hilift 1y ago
> privatised water companies have built no new reservoir capacity Of course not. The water company was in terrible shape (read: lacking funds) before it was dumped on a commercial company that does not have deep pockets like Chevron. Thames Water owes £16.8 billion. That money is already gone. No one is going to swoop in to save the day. Taxpayers will eat the bill, and invest even more to reverse decades of neglect. All of those hard decisions labour committed to make are unnecessary when nothing is done and they are made for you. The country has limited funds, and is spending funds it doesn't have on things like billions on hotels for 29,000 unauthorized travelers so far this year. UK external debt is £2.7 trillion, and whats her name said yesterday it may be necessary to ask the IMF for a loan? Water company indeed.
BrtByte 1y ago
You can't run a critical resource like water purely on market incentives when the payoff for long-term infrastructure investment takes decades
littlestymaar 1y ago
It turns out that “If you put the markets in charge of the United Kingdom, in thirty years there’d be a shortage of water” is the realistic version of the Sahara sand quote.
pojzon 1y ago
Nestle CEO: „Water should not be human right”
c0ax9 1y ago
The privatization of water supply is featured prominently in Adam Curtis's new series "Shifty," and paints a similar picture. Profit > infrastructure is ruining so much... https://en.wikipedia.org/wiki/Shifty_(TV_series) https://en.wikipedia.org/wiki/Shifty_(TV_series)

atoav 1y ago

Privatization just means that if you were interested in the outcome before (having water), they are now interested in the money that can be extracted from it. And that means their interest is to but a modern branding onto an operation that has been stripped for wires as long as it works. I grew up during a privatization wave in my country and the promise of the proponents always was that private ownership means waste is cut. Now all these sectors that produced decent services before have gone to shit. Be it postal, trains, highways, whatever. Everything is broken, underfunded, services less people for more money. 10 years ago when I said the same thing I would get a lot of counter arguments that all boiled down to: "Trust it bro" or "But governmental is more waste". Now these arguments don't come up nearly as much. Everybody can see it. The thing is, if you want to avoid waste then literally the best strategy is to go into a desert where there is no service. No service means no waste. But it also means no service.

fragmede 1y ago
Waste and inefficiency should be stomped out, but it doesn't need to be ground down into a fine dust and then vaporized into nothingness. A little bit of waste is fine. You want slack in your system in case of emergencies.
- atoav 1y ago
  The problem with that attitude is that waste isn't that easy to define: - what is waste during good times may be essential during bad ones. If your service utilizes 100% CPU during normal operation (no waste), it has zero slack for changes in the environment. - what is waste for a manager, may be an essential service to the persons using it. So maybe that cell tower in a remote area may be operating at a loss, because few people live there, but to them it is essential (or to you, if you break your ankle during a hike). Privatized services don't have the goal of covering people, but earning money. Covering people may be a side effect, but it isn't necessarily the goal - cutting waste can make the service less attractive as a whole and make it enter a downward spiral. E.g. if you cut all non-profitable lines in a public transport system your public transport system becomes less usable as a whole, as people now have a harder time fetting where they want to go. That leads to less people using it. That in turn leads to you having to cut more lines, which in turn... You get the idea. No service means no waste, any service has/to have waste - some waste appears like waste because managers don't understand why it is there. Essentially a Chesterton's fence-type of situation. Like with the OceanGate submarine implosion, that essentially happened because the late owner of the company decided that all these lengthy certification processes the submersible industry had written in blood were waste and could be skipped. He didn't posses the expertise to know why it was there in the first place, so it was waste. With some services the goal isn't (or shouldn't be) to do "something" as cheaply as possible while extracting value, with some services the goal ought to be to provide the service in a sustainable fashion to everybody ad infinitum, while trying not to waste more money than is necessary and creating budgetary timebombs for future administrations/generations/managers. Those are entirely different incentives, leading to entirely different results. And depending on which service we talk about the reasonability of chosing one over the other may differ. That being said, there can be real waste to cut. But cutting everything based on suspicion is very expensive in the long run.
TheOtherHobbes 1y ago
The "waste" argument is standard neoliberal nonsense. There are very few situations where the private sector provides a better service for less money. (See also the UK's NHS, which still provides a very efficient - if increasingly broken - service, while being starved of cash.) Like most neoliberal nonsense, it's not just a lie, it's a misdirection. What it really means is "Government money is being spent on providing a service for poor people, when it should be handed out to rich people." It's driven by entitlement, not generosity. You can see this very clearly in the way privatised CEOs are paid. The water companies quite obviously and literally prioritise CEO pay rises and dividends over service quality. That's not an accident. It's the true meaning of privatisation. That is what privatisation is. The "customer" in privatised industries isn't the public, it's upper management and other big shareholders.
- ForHackernews 1y ago
  Is the NHS "starved for money"? I don't disagree that it's verging on collapse, but they keep giving it more and more money. The budget goes up, both in real terms and as a percentage of GDP: https://commonslibrary.parliament.uk/research-briefings/sn00724/ https://commonslibrary.parliament.uk/research-briefings/sn00... How much would be enough? 15% of GDP, 20%, 50%? I'm generally in favour of public services over ruthless privatization but I don't understand how Britain is to survive as a nation of nurses and pensioners supported by a tax base of Uber Eats riders.
- billy99k 1y ago
  "There are very few situations where the private sector provides a better service for less money" The issue is when there is a monopoly. When you have a government monopoly of a specific industry, it's going to be poor. If the same thing happens in private industry, it's a similar outcome. There is no competition with the government, because they play by rules that makes it impossible to compete as a private business, so it's by default, a monopoly. When companies compete, it's always better for the customer. Government run Internet (which is what we had before it was commercialized), was stuck in the same place for decades, with no innovation. It's pretty much universal and relatively cheap now. In the US, you can look at the post office and private companies like UPS and Fedex. I used to run a business for almost a decade where I would ship out 100s of packages/week. The post office always had poor service compared to the rest...and the cost ended up being comparable. If you lost a package? with the post office, there was no real way to get your money back. There's waste with government-run services because they never have to really worry about profit or losing money. Every government-run service I've ever used has been inefficient.

autoexec 1y ago

When it comes to things like utilities every penny of profit comes at the expense of the public. Either prices are raised so that a small number of people can stuff their pockets with extra cash above what it costs to deliver the service and maintain the system or they get that extra money by failing to deliver the service or they do it by failing to maintain the system itself. I think the neglect and failure to invest in infrastructure is the worst because unlike high bills or increasing numbers of people not being served it's more or less invisible to the public while companies and shareholders rake in a lot of money, but doing that causes problems tax payers end up footing the bill for down the road, and it may not always be obvious to the public what the cause was. A power company who makes profit by neglecting the condition of their power lines can cause a wild fire, but it takes a lot of time, taxpayer money, and luck to identify that the lines were the source of the fire, to discover that the company knew (or should have known) about the problem and done something about it, to get enough proof of those things that a lawsuit is possible, and to fight it out in court in order to hold the company accountable. It's not just the cost of fire the public is on the hook for in that case, but the costs of everything else too.

krona 1y ago
> I think the neglect and failure to invest in infrastructure is the worst Cumulative capital investment by water companies in England and Wales since privatisation: £250bn. The infrastructure they inherited was never designed for the things it's being asked to do today, and it has a life expectancy. It would literally cost trillions to upgrade the entire sewerage system. This isn't apologia, it's just reality. The road network will also face the same fate since much of it was built >50 years ago and has a life expectancy of roughly 50 years. The country simply can't afford to replace it.
- another-dave 1y ago
  I mean, all the more reason it shouldn't be privatised. If it only makes sense to have one of something (road network, water system) it's a natural monopoly, _and_ it's going to require large public investment to be maintained, why wouldn't you in-house the expertise needed to do that and avoid the shareholder dividends overhead?

braza 1y ago

> Water should never have been privatised. At least not without a framework for a national strategy for water. But one can make a very fair argument where you can have a strong regulatory framework to ensure investment goals, exit clauses, and penalties in case of missing goals, no?

elAhmo 1y ago
Yes, but that would make private investment in utilities not attractive as the profits would be low or non existent. Competing forces
rlpb 1y ago
That never happens because the appointed regulator has no incentive to efficiently and effectively regulate, either.
- kolektiv 1y ago
  Particularly when, as in the case of UK water privatisation, there's a fairly convenient revolving door between the supposed regulator and the privatised water companies. Poacher turned entirely ineffective and rather friendly gamekeeper...
  - arethuza 1y ago
    Nitpick - English water privatisation, I don't think the rest of the UK has private water companies - we certainly don't here in Scotland. Scottish Water is controlled by the Scottish Government.
    - kolektiv 1y ago
      You're absolutely right, English - my family north of the border are no doubt cursing me as we speak, I'll go and replace the cone as penance next time I'm there.
    - burtness 1y ago
      *England and Wales

tome 1y ago

> privatised water companies have built no new reservoir capacity and relied on drawing from rivers and other sources Why does privatisation mean that the government can't build infrastructure? I think the answer is more likely nimbyism than privatisation. I personally think it makes no sense to privatise infrastructure for which no competition can reasonably take place, and I'd include distribution networks of many sorts in that: water distribution, rail lines, electricity distribution. But I'm not aware that privatisation means that the state can't take on reservoir projects. The problem is that development of all kinds in the UK is utterly crippled by nimbyism. The article mentions the proposed Abingdon reservoir but links it to the boogyman of data centres rather than call out what the picture obviously shows: it's being stalled by nimbys.

PaulRobinson 1y ago
"Privatisation" does not preclude government investment in infrastructure. "Thatcherism" does, however. It is a warped [Ayn] Randian view of capitalism and those who drive it. State intervention into the machinery of capital, even when it comes to essential infrastructure, is considered a corrupting influence. Nobody able to change national policy within Downing Street or even ministries in Whitehall, at the time - or since - has had the gumption to say it's not working and we need to do something about it. You are however right, that NIMBYism has also worked remarkably well - the planning process in the UK is the reason we can't build HS2 cheaply or quickly, and that is relatively painless compared to wind farms, solar farms (also often blocked), never mind building a dam and flooding an entire valley, which was the old way of creating new capacity.
- tome 1y ago
  > Nobody able to change national policy within Downing Street or even ministries in Whitehall, at the time - or since - has had the gumption to say it's not working and we need to do something about it. Thatcher's been dead for 12 years and out of power for 35, so I'm not sure why it should take much gumption. All it needs is national leaders who believe in the flourishing of the country, and that that requires infrastructure development, not just banks, software and scientific research. Unfortunately I don't see any such leader on the horizon.

seanalltogether 1y ago

The concept of reservoirs and emergency supply seems to be completely at odds with privatisation. What private company is going to spend loads of money to build deep reservoirs that are stressed only once every 5 or 10 years. None. They're going to reach for an immediate supply like a river or aquifer and then raise prices if those sources run low. It's insane to plan out infrastructure on the belief that private companies are capable of building such large buffers.

tome 1y ago
I'm inclined to agree that privatisation is bad for long term planning, but the history of the Abingdon Reservoir proposal seems to be counter evidence: https://en.wikipedia.org/wiki/Abingdon_Reservoir https://en.wikipedia.org/wiki/Abingdon_Reservoir Looks like Thames Water (a private company) proposed the development nearly 20 years ago, but it was turned down by the Environment Agency, a government body. > Plans for a £1bn reservoir in Oxfordshire to supply more than eight million people over the next 25 years have been rejected by the government. > Thames Water wants to build a site on four square miles of land near Abingdon to help ensure future demand is met. > The bid went to a public inquiry but the secretary of state said there was "no immediate need" for such a site. "Abingdon £1bn reservoir plan rejected by government" https://www.bbc.co.uk/news/uk-england-oxfordshire-12651131 https://www.bbc.co.uk/news/uk-england-oxfordshire-12651131
- blitzar 1y ago
  > Thames Water's computer-generated image of how the reservoir would look We have come a long way in computer generated images in 14 years.
- zarzavat 1y ago
  Good find, I admit I had jumped on the Thames Water is Evil bandwagon, and for the record they are evil, but in this case they have been out-eviled by that other driver of British societal regression: > Campaigners had fought the plan, claiming there was no need for such a large reservoir and that it would damage the environment. > Leader of the Vale of White Horse Council Tony de Vere said: "We are delighted with this decision. > "Local residents were very worried about the impact of such a large reservoir and we share their relief that the plan has been axed."

komali2 1y ago

I was fascinated on my recent trip to the UK to learn how much of their infrastructure they'd privatized semi-recently. Trains, hm, well it kinda works in Japan so maybe not so bad, but, water and SEWAGE??? In what universe does it make sense to have one of the most critical infrastructure systems, the backbone of health for a city, participate in a marketplace? Insanity. Not to mention the fact that at the end of the day only a government could possibly have the ability and authority and budget to run new lines or the motivation to do maintenance. What's next, pay per poop?

octo888 1y ago
It makes perfect sense. The capitalists can constrain the supply, push up prices. And we Brits don't revolt – even protesting is highly legally-risky these days. Is there a better country to do such things? I don't think so
- ahazred8ta 1y ago
  "Careful Now." "Down With This Sort of Thing." "Unmutual."
adornKey 1y ago
More likely they'll hand out laxatives and ask people to help solve some fertilization crisis out there in the fields... And there'll be commercials - Scotland - Heavy rain (horizontal) - A woman totally drenched (with baby in hands) - In panic - Warning about the impending water crisis.
jplrssn 1y ago
It’s ironic that after British Rail was privatized, many UK rail services ended up being run by subsidiaries of other European state railways: French SNCF, Dutch NS, Italian Trenitalia, and so on. Turns out the state knows something about running trains after all.
- arethuza 1y ago
  For a while Abellio ran rail services in Scotland - they were absolutely awful and things got a lot better almost immediately the Scottish Government terminated their franchise.

graemep 1y ago

> Water should never have been privatised. At least not without a framework for a national strategy for water. State ownership is not a panacea either. State owned Scottish Water has more sewer leaks than the privatised companies in England and Wales do.

bilekas 1y ago
The responsibility to look after the citizens basic needs such as water is on the government. Not private for-profit companies. If they can't do their job, then we shouldn't pay our taxes ?
- dukeyukey 1y ago
  You could say the same argument about food, but the system of privately owned farms moving food via privately owned logistics companies to privately owned grocery shops works very well. Yes, it's the responsibility of the state that it's citizens can acquire their needs, but that doesn't mean it has to be government owned.
  - graemep 1y ago
    The difference being that farmers and logistics companies and shops work in a competitive market where as water in a natural monopoly. The system does not work perfectly though. In the UK big supermarkets have monopsony power over farmers and smaller farmers are being squeezed out by big farm owners (who tend to have lower standards, especially of animal welfare).
  - bilekas 1y ago
    > Yes, it's the responsibility of the state that it's citizens can acquire their needs, but that doesn't mean it has to be government owned. Absolutely agree, it may not need to be government owned, however it should absolutely be government funded.
  - Ericson2314 1y ago
    Giving how much subsidies farmers get, and they still whine all the fucking time, I would gladly nationalize them all. Corn ethanal? Gone. Crazy EU stuff? Gone.

deleted 1y ago

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davej 1y ago

Here in Ireland, our water is a public service and we have similar supply issues to the UK (and a similar rainy climate). I'm not discounting your analysis and I'm sure there are lots of other variables but it's always good to compare other outcomes when discussing counterfactuals.

sandbags 1y ago
It's a fair point that nationalised water industries can also be poorly run. But I'm not sure what the argument is that means the amount of money that privatised UK water companies have paid in dividends vs. invested in maintaining and expanding infrastructure isn't a significant part of the UK's problems. However, as a further point. If national priorities change then a nationalised water industry can respond (relatively) quickly. But what can be done with a bunch of potentially foreign owned profit-seeking companies?
- qcnguy 1y ago
  Paying dividends is good. It's how you attract the capital for investment without having to raise it via sale of government bonds or money printing. The problem here is financial illiteracy - the alternative to paying dividends isn't that the same money all gets spent on the water network. Large scale investment is rarely funded from general revenues as it'd require spending years accumulating a huge cash pile that sits around doing nothing, and governments see such piles as pigs to slaughter. So the alternative is that the government borrows the money and then has to pay interest on it. From your perspective the UK "wastes" 8% of its spending on interest payments, and it's rising rapidly, but of course if it didn't pay interest then nobody would lend it money and all funds would have to either come from taxes or via inflation.
  - KoolKat23 1y ago
    Government bonds are considered lower risk and the interest rate is lower, i.e they will attract the same money for less. Private shareholders are more expensive. This also doesn't consider "debt recapitalisation" where these private companies draw down new debt on promise of future cash inflows from consumers and then suck out dividend cash "de-risking" their holding in the company. The government can bail it out or the can close it then, it's not their problem as they received the cash upfront.

mhh__ 1y ago

You're not taking into account how hard it is to get regulatory/planning approval to build anything in Britain.

hopelite 1y ago

How can we just ignore the elephant in the room; that not only has the UK population risen by almost a 1/3 since 1960, but the nature of that population has also been changed since that time, regardless of how one feels about it. The UK (as only one example) is simply not the same thing as it was in 1960. Why would we expect the same results as if it’s just a matter of catching up from being behind, all while the ability to do so has changed? If the UK wasn’t able to keep up with water storage capacity between 1960–1989, and has not built any capacity whatsoever since 1989; what makes one believe that somehow the UK, with massive headwinds blowing right into its face, could not only maintain the current capacity but expand it by about 50% (pop growth plus backlog), at the same time that the population has increased by ~1/3 and the nature of the people in the UK has changed significantly from a people that was able to do that in the past, but clearly could not do so since 1960, and while the finances of the country are inverting? It is a gamblers fallacy. It is the aging man who still thinks he is in his prime, but also after decades of neglect and abuse of his body on advice of a devil on his shoulder, the serpent whispering assurances in his ear to indulge in harmful things and to win back his loses.

Earw0rm 1y ago
I'm curious what you mean about the nature of the population? Age? Ethnic makeup? Urbanisation? The population is older, less white, more in cities, fewer kids, but I'm not sure what any of that has to do with our water consumption or ability to build for it - other than maybe older people, especially the ones that moved out of the cities to live some LOTR-inspired faux-rural lifestyle, tend to be more NIMBY? But equally though our appliances and lifestyles aren't the same as 1960. Showers are massively more efficient than baths, but we use them daily instead of once a week. Industry has mostly disappeared, and thermal power stations are on the way out (both extremely heavy water users), but agriculture has become more intensive.

8fingerlouie 1y ago

It's fine. Water companies will build new resevoir capacity, but since the extra money they already bill your for, for maintaining the infrastructure, has been paid out to shareholders, it will of course require an additional fee on your bill. At least that has been my experience with everything privatized in the past couple of decades. The private investors scoop up every bit of value, and when it's time to pay the bill, it's the customers that must pay (again). Fortunately we have regulations in place, but that doesn't help when all value has been siphoned from the company and all there's left is debt.

epanchin 1y ago

The Town and Country Planning Act 1990. Responsible for putting a pin in development and turning Britain into a museum, with insufficient water or power. It should urgently be reformed.

bargainbin 1y ago

It shouldn’t be considered a source of profit at all, attractive or not. Water is a fundamental resource for human life. We pay bills to ensure the infrastructure is there to provide it. If the infrastructure isn’t there, we haven’t received what we paid for. Worse, without EU regulation these companies are now blasting sewage into lakes and rivers. Ofwat can’t do anything. At this point I feel there’s no solution other than nationalising the infrastructure again and ploughing billions of tax payers money into yet another failed Thatcher initiative. Of course that will never happen, because we’ve not had a government willing to make sweeping changes like that since Thatcher. Except maybe Liz Truss with her exceptional grasp of economics.

jmyeet 1y ago

So... because capitalism. People have this propagandized view that the "free market" (which isn't real) is responsible for innovation. All capitalism does is build enclosures and engage in rent-seeking. With the tendency for profits to decrease, ultimately it comes down to cutting costs and raising prices. So why would a water company invest in a new reservoir? That increases supply. That might lower prices. The UK is going to neoliberal all the way into being a developing nation.

oceanplexian 1y ago
>People have this propagandized view that the "free market" (which isn't real) is responsible for innovation. In the last century and a half, we went from candle light and horse and buggy, to the lowest level of global poverty in the last 5,000 years of recorded human history. If capitalism wasn't responsible then what was?
- jmyeet 1y ago
  China is almost solely responsible for the reduction in global extreme poverty [1]. [1]: https://www.worldbank.org/en/news/press-release/2022/04/01/lifting-800-million-people-out-of-poverty-new-report-looks-at-lessons-from-china-s-experience https://www.worldbank.org/en/news/press-release/2022/04/01/l...
  - gerdesj 1y ago
    Please expand your thesis.

otikik 1y ago

"Thanks, Thatcher"

ch4s3 1y ago

Someone down thread posted that the private company has proposed several new reservoirs starting in 1992 and they've all been blocked on environmental grounds by the government or by NIMBYs. For example the Abingdon Reservoir has been in planning for 19 years[1]. It is opposed by GARD[2], the Group Against Reservoir Development. It's hard to see how this is the fault of privatization. [1]https://en.wikipedia.org/wiki/Abingdon_Reservoir https://en.wikipedia.org/wiki/Abingdon_Reservoir [2] https://groupagainstreservoirdevelopment.org/ https://groupagainstreservoirdevelopment.org/

therobots927 1y ago

Thatcher would be proud. What a waste

manoDev 1y ago

Seems fitting, considering it’s the birthplace of liberalism.

vondur 1y ago

As a counter point, go look at the Los Angeles Department of Water and Power. It's a publicly owned municipal utility and is notorious for its corruption. The DWP doesn't perform any maintenance, lettings things break completely and then having to fix huge issues. They were the group who failed to fill a reservoir in the Pacific Palisades to save some money where firefighters weren't able to use to fight the fires.

mock-possum 1y ago
Ideally, the dwp is accountable to the city, and therefore to voters and the state, in a way that a private company profoundly is not.

Hilift 1y ago

> privatised water companies have built no new reservoir capacity Of course not. The water company was in terrible shape (read: lacking funds) before it was dumped on a commercial company that does not have deep pockets like Chevron. Thames Water owes £16.8 billion. That money is already gone. No one is going to swoop in to save the day. Taxpayers will eat the bill, and invest even more to reverse decades of neglect. All of those hard decisions labour committed to make are unnecessary when nothing is done and they are made for you. The country has limited funds, and is spending funds it doesn't have on things like billions on hotels for 29,000 unauthorized travelers so far this year. UK external debt is £2.7 trillion, and whats her name said yesterday it may be necessary to ask the IMF for a loan? Water company indeed.

BrtByte 1y ago

You can't run a critical resource like water purely on market incentives when the payoff for long-term infrastructure investment takes decades

littlestymaar 1y ago

It turns out that “If you put the markets in charge of the United Kingdom, in thirty years there’d be a shortage of water” is the realistic version of the Sahara sand quote.

pojzon 1y ago

Nestle CEO: „Water should not be human right”

c0ax9 1y ago

The privatization of water supply is featured prominently in Adam Curtis's new series "Shifty," and paints a similar picture. Profit > infrastructure is ruining so much... https://en.wikipedia.org/wiki/Shifty_(TV_series) https://en.wikipedia.org/wiki/Shifty_(TV_series)