Labour to build new reservoirs and sewage systems using billions in private finance
Labour to build new reservoirs and sewage systems using billions in private finance
Environment Secretary Steve Reed said the investment is the "biggest ever" in the water sector
Steve Reed[, the Environmental Secretary,] said the “biggest ever investment” in the water industry, amounting to around £88bn in private cash, will allow the Government to “fix the foundations” of the water sector and bring an end to the sewage crisis.
Clean water campaigners have criticised the fact that bill payers will be forced to pay for the clean up of the country’s waterways, with average bills expected to rise by around £19 a year between 2025-2030.
But officials have insisted that under the Government’s reforms, every penny of cash raised will be invested into major infrastructure upgrades, rather than being syphoned off in dividends to investors.
New plans being introduced will mean water firms that fail to spend the money raised from customers on infrastructure upgrades will be refunded to bill payers.
The spending is due to be finalised by Ofwat in December when it sets out its final determination for bill rises. Its initial recommendation, published over the summer, was for £88bn to be raised through customer bills, despite the water industry asking for £105bn.
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Under the plans, around £10bn will be invested in storm overflow upgrades, £4bn to boost the country’s water supply, including building the first new reservoirs for more than a generation, and £6bn in tackling nutrient pollution, caused largely by the agriculture sector. The Government hopes that building more reservoirs will increase the UK’s water resillience [sic] and support its plans to build more new homes.
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As well as protecting investment in water infrastructure, the Government earlier this month published legislation to toughen up the laws that will see water bosses face jail time if they are found to be covering up illegal sewage dumping.The Water (Special Measures) Bill, will also give the regulator the power to ban the payment of bonuses to water executives if they are found to be failing customers.
Regulator, the Environment Agency (EA), will also see its staffing numbers increased, while all investigations into water firms will be paid for by the sector, significantly boosting resources for the body.
Making the public foot the bill for decades of under-investment as these companies paid out £10s of bns in dividends and continuing on with the failure of privatisation.
These private financing schemes seem to always be so much more expensive than funding this through traditional finance streams.
It's good they're giving the EA some extra funding and powers, but we really need to nationalise this. Water privatisation has been a disaster, and the longer we keep it going the more money they'll be able to syphon out.
At least Major and Blair could use Maastricht restrictions as an excuse for using PFI, Sir Starmer doesn't even have that.
I thought these PFI things were generally considered a bad idea?
It was introduced under the Tories but massively expanded by new labour. The article says that the money won't be syphoned off by investors and shareholders but I'm extremely sceptical. The only solution is nationalisation.