Where is the competition in water companies? What choice does the consumer have?

zzzt
zzzt Posts: 407 Forumite
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edited 9 July 2022 at 3:57PM in Water bills
Can someone explain this to me. I understand that energy companies are privatised because there is competition between them for providing the lowest prices or best service (or at least there was before this current crisis). The energy companies are creating energy or buying it and they can choose where to buy it from or how to make it.

But with water, you are completely dependent on who provides the water where you live and you have no choice. These companies own all the pipework and the reservoirs in a particular part of the country. For example, if you live in parts of the East Midlands it will be Severn Trent Water. If you are in the North West it will be United Utilities. If you are in Oxfordshire it'll be Thames Water.

So they charge whatever and you have to pay it. There is no choice on the part of the consumer. And there is no reason for the water company to improve, or try to be more efficient. They are all dumping sewage into rivers. What incentive is there for them to do a good job, rather than cutting corners and maximising profits? They won't ever lose their customers.

Railways also don't make sense to be in private hands since again, going from one particular town to another there generally is not a choice - the line is run by one company and you have to use them. But at least train companies can have the licence taken off them and given to someone else if the government thinks they are doing badly. Can that ever happen with water suppliers?

I assume it's regulated in some way. But if the government has to tell these companies to not be dicks and fine them if they are, then wouldn't it be better for them just to be government run to begin with, instead of run for profit? Access to clean water is a human right, not a way to make money.

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  • QrizB
    QrizB Posts: 13,822 Forumite
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    zzzt said:
    I assume it's regulated in some way.
    Yes, water is a natural monopoly and water suppliers are regulated by Ofwat.
    But if the government has to tell these companies to not be dicks and fine them if they are, then wouldn't it be better for them just to be government run to begin with, instead of run for profit?
    The people of the UK elected a government that chose to privatise the water companies, and haven't yet elected a government that wants to renationalise them.
    It was an option in 2017, for example.
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