UK water London-centricity

Roger today picked up two interesting news stories about how London-centric the UK water business can be.

The first is a report in The Independent that Ofwat has been unable to find a suitable number of candidates to interview to replace current Chairman, Philip Fletcher, quoting a source suggesting it’s because ‘the best people’ for the job won’t work in Birmingham! Ofwat is now increasing the prospective salary for the three-day week job from £84,000 to £100,000 and removing the apparent requirement for the candidate to work in Birmingham.

I don’t know who the source is for The Independent’s story. But their take on Ofwat’s logic to locate in Birmingham in the first place is just pure London-centricity:

‘It was typically stupid public-sector thinking … [y]ou move loads of your staff to somewhere cheaper like Birmingham, then you can’t get the best people …’

To my understanding, Ofwat chose to locate in Birmingham because most of the water companies are not in London. I recall seeing material that Ofwat feels vindicated in its strategy, based on feedback from water companies. Against a policy backdrop that includes devolution and localism/Big Society aims, calls to concentrate even more power in London really rile me, especially as most of the stakeholders involved in this case are not even based there!

This brings me on to Roger’s second find – a plan reported in the Manchester Evening News to address water shortage in the South East of England by running a water pipe from United Utilities’ area in the North West down to London Euston, alongside the planned HS2 (High Speed Two) rail link!

UU has apparently been inspired by Chinese construction projects. Its plan would involve 200 miles of steel pipe at a cost of at least £2 billion, according to the MEN, and the idea is going to be presented to the Environment Food and Rural Affairs Select Committee next month.

This type of cost figure was missing from the all-party water group meeting I spoke at last week. There MPs asked about a ‘national grid’ for water. Figures were unavailable from the speakers but if £2 billion had been mentioned as the minimum cost – for just one part of it – I’m pretty sure some eyebrows would have been raised!

The MEN also quotes UU’s chief financial officer Russ Houlden on the soundness of the overall idea:

‘Wacky? Maybe but the Victorians had bold ideas when they built our aqueducts …’

I’ve been teaching recently, so I happen to have at my fingertips the original cost of UU’s late-19th century Thirlmere Aqueduct, which some bold Victorians did indeed build. It cost £3-4 million at the time. That’s £180-240 million in current money, not £2 billion. Unsurprisingly the MEN story closes by saying:

‘Details of how the pipeline would be funded and whether any of the cost would be passed onto customers have not been discussed at this stage.’

Well, given the figures, quite!

Now, UU’s Russ Houlden is right in that HS2 provides ‘a once in a lifetime opportunity for joined-up working to minimise planning difficulties and environmental impact’ by laying the pipe in parallel. He may also be right when he says the pipe ‘would only be used as an insurance policy in times of water shortage and so operational costs should be negligible’ – although I imagine in reality that once’s it’s in and available for use we might find ever increasing demand for water from it, given current and projected future North-South water resource imbalances.

Water bills are already going up. Most scenarios I’ve seen suggest they’ll continue to for some time. Things like the £3.5 billion Thames Tideway Project are in the pipeline. Given all this, are water customers really going to want to pay to fund a ‘wacky’ project like this?

Update (15/11/2016): London photo added from here.

Duncan Thomas


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