Water sector to wait until 2027 for full details of Burnham’s overhaul
Prime Minister Andy Burnham has promised greater ‘public control’ of the water industry — but officials are still figuring out how it will work.
The overhaul of England's water sector, proposed by new Prime Minister Andy Burnham, remains shrouded in detail until at least 2027. While a 10-year plan for Britain is expected in December, the finer nuances of ownership models and fiscal implications are anticipated in Chancellor John Healey's multi-year spending review. This timing is crucial, as it could force the Treasury to find billions of pounds if privately-owned shares are transferred to the public sector.
Burnham, known for outlining broad policy directions, aims to gain private industry buy-in through a gradual process. However, the water sector, particularly firms like Water UK, argues that this uncertainty threatens investor confidence and could lead to a downgrade by credit rating agencies, adding £40 to annual water bills. The government faces pressure to act quickly, with Water UK urging for a decision on former Bank of England Deputy Governor Jon Cunliffe's recommendations.
The proposed new regulator and its responsibilities remain unclear, causing further investor uncertainty. Despite announcing a water bill to lift the ban on government shareholding in English water firms, Burnham has ruled out full nationalization, estimating the move would cost £100 billion for England and Wales. Burnham's plan includes public control elements, such as regional mayors' scrutiny powers and closing loopholes for excessive executive bonuses.
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