Investors stripping cash from water firms ‘criminal' says ex-Wessex Water chief
Colin Skellett, who helmed the south-west England utility from 1988 to 2024, argued against nationalising water companies because of the industry requiring 'continuous levels of investment'.
He spoke as campaigners and experts urged the Government to explore public ownership during the UK River Summit in south London on Tuesday.
Ministers have promised a 'fundamental reset' following years of companies paying out large dividend that diverted money away from infrastructure investment and maintenance, leading to sewage pollution and rising bills.
However, they have ruled out nationalisation and instead are focusing efforts on tightening rules, increasing investment and strengthening penalties within the current system of regulated private firms.
Minister Emma Hardy talking about tackling sewage with @RiverActionUK but the government is ignoring the reality:
7 European countries with highest average of 90%+ bathing sites achieving 'excellent' status – all are 90%+ publicly owned 🇨🇾🇦🇹🇬🇷🇲🇹🇭🇷🇩🇪🇩🇰 https://t.co/cH05zfLzC0 pic.twitter.com/d4dxz35bPV
— Cat Hobbs (@CatHobbs) July 8, 2025
Speaking at the summit, Mr Skellett said he has seen the industry change since he joined it in 1974, saying it is one that 'requires continuous levels of investment'.
'The problem with public ownership is the Government always has other things it wants to spend its money on,' the former Wessex boss said.
He argued that privatisation helped to get debt off the Government's balance sheet and boost investment but this changed when the 'wrong sort of investors' began stripping cash out of companies through high dividends.
'It was bloody criminal what happened – the amount of money that was stripped out of not just Thames (Water), but a number of companies,' he said.
'So we need that to change (in) the system. It's not so much about ownership, it's more about how you regulate it, how you control it, and how you make sure the investment continues.'
It came as the Environment Department (Defra) announced an increase in funding for the Environment Agency from £114 million in 2022/23 to £189 million this current financial year, a sum which is understood to have been welcomed by the regulator.
🚨REVEALED: Over half of adults in England don't trust the Government to end the UK's sewage crisis. And who can blame them?
💩 158,000+ sewage spills already this year.
📣 We're in London today, demanding the radical change we need. Are you with us?✊➡️ Email your MP today and… pic.twitter.com/rz02U8abgY
— Surfers Against Sewage (@sascampaigns) July 2, 2025
Ministers are also currently awaiting the publication of the independent water commission's final report and recommendations, led by Sir Jon Cunliffe, which is expected in two weeks.
The review is not exploring nationalisation as an option, with campaigners at the summit indicating they will continue to campaign on the issue following its publication.
Ewan McGaughey, professor of law at King's College London, argued that the Government should take away licences from failing water companies and transition them into a long-term sustainable model of public ownership, calling privatisation in England a 'broken model'.
Mr McGaughey said 90% of countries and cities around the world have water in public ownership and cited examples such as Berlin and Paris, which brought their sectors back into public ownership in 2013 and 2009 respectively after the privatised model failed.
'Bills go down. Water quality goes up. It's actually not really that controversial. You just have to look at the evidence, and you can see that public ownership works better,' he said.
Cat Hobbs, founder and We Own It, which campaigns for public ownership of public services, said the Government's decision to not allow the independent review to explore nationalisation is a 'scandal'.
'That has to change. They still have time to change it,' she said,
And Ashley Smith, founder of Windrush Against Sewage Pollution (WASP), called privatisation a 'ludicrous scam', arguing that there has never been a single year since the firms were privatised when shareholders put in more money than they took out of the firms.
Later, water minister Emma Hardy defended the Government's approach to reforming the sector.
'There's been a lack of sustained investment in the industry for an incredibly long time,' she told the summit.
'We have taken immediate action, but there are some things that, of course, are going to take longer to fix.
'We want to listen to you and we can have difference of opinion – that is absolutely fine but I want to make sure that we try and bring as many people with us as possible because fundamentally we're all trying to get to the same place and that place is an effective water system with reduced pollution which is better for customers and better for the environment.'
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STV News
25 minutes ago
- STV News
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The Herald Scotland
35 minutes ago
- The Herald Scotland
UN probes Scots judge-led body's 'breach' of international law
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Scotsman
an hour ago
- Scotsman
Investors need certainty to build the homes Scotland needs
We must unlock the investment that would deliver new housing, says Colin Brown Sign up to our daily newsletter – Regular news stories and round-ups from around Scotland direct to your inbox Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... In May 2024, the Scottish Parliament declared a national 'housing emergency' with some councils also declaring a housing emergency in their areas. The announcement of the emergency came two months after the Scottish Government laid the Housing (Scotland) Bill before the Scottish Parliament. The Bill continues to work its way through Holyrood and is expected to come into force later this year. Advertisement Hide Ad Advertisement Hide Ad Observers in the world of institutional investment and those working in the sector have been watching the progress of the Bill with interest. Of particular concern to investors are proposals around rent controls. Colin Brown is a Partner at TLT To give one example that has occurred recently – a London-based investment firm, was about to commit many millions of pounds to its first Scottish investment before discovering that a committee considering the Bill had voted to include purpose-built student accommodation as subject to statutory rent controls. All of the financial appraisals the firm had undertaken in making the decision to invest in Scotland were potentially being ripped up by MSPs and they had no power to do anything about this. In this situation, the Scottish Government moved quickly to make clear it would not support rent control for purpose-built student accommodation. Whilst the project is now starting to come out of the ground it remains to be seen whether they consider Scotland a safe haven for future investment. The rental income which institutional investors derive from their investments in bricks and mortar helps to fund many individuals' pensions. The investors need to understand that in exchange for making their money available they will get a return on their investment and this return has generally been left to market forces – the law of supply and demand. The housing emergency should make investment in new build housing in Scotland a win-win. The country gets much-needed new housing to alleviate the emergency, and the investment funds get to deploy their capital to deliver housing and make a return on their investment. Advertisement Hide Ad Advertisement Hide Ad In the UK in the first quarter of this year £1.2 billion was invested in private rental accommodation with the potential for £6bn to be invested by the end of the year. 76 per cent of this investment is being directed outside London, with Manchester, Birmingham, and Leeds leading the way. Every penny of this investment creates new housing and sustains and creates job opportunities. The fact that Scotland has not been able to open the investment tap when cities in England are seeing private rental accommodation expand, could be seen as a missed opportunity. In launching the latest consultation, the Social Justice Secretary acknowledges that rental properties are a crucial element of the efforts to tackle the housing emergency. Government policy has slowed investment into the sector in recent years and resulted in lower investor confidence in providing much-needed housing. Rent caps and controls are of course not universally despised and a balance must be struck between protecting tenants and unlocking the investment that delivers the new housing. Advertisement Hide Ad Advertisement Hide Ad The latest consultation on exemptions for certain types of properties from rent control closed earlier this month. There will be investors with capital looking for a home waiting to see if the legislative and political environment in Scotland means they should be deploying more of this in Scotland or continuing to explore opportunities which guarantee a better return elsewhere.
