Leaking money. The finance costs of privatised water and regulation in England and Wales: Scottish public ownership shows potential savings
Bibliographic record
Abstract
• The financial costs of the privatised water and sewerage companies of England and Wales averaged 35% of company revenue from customer bills in 2023-24 o These costs are the return on capital to private shareholders and the interest (and index-linking) on the bonds and loans from creditors o These financial costs mean that over one-third of customer bills pass straight through the companies without being used for water and sewerage services o All companies have high finance costs, including Welsh Water: despite being owned by a ‘non-profit’ company, it loses 41% of bills to finance costs – the same as Thames Water • By contrast, the financial costs of publicly owned Scottish Water represented only 8% of revenue in 2023-24: less than a quarter of the costs in England and Wales o This is partly due to not having to pay dividends to private shareholders o Scottish Water has also taken on far less debt than the E&W companies • Scottish Water has on average invested about £180 per household per year since 2022 – about 50% more than the average in England and Wales over the same period, which is about £120. • The high financial costs of the private companies are reinforced by the regulatory system. Almost half of the 35% price increase planned by OFWAT for the next 5 years 2025-30 is based on doubling the return on capital/financial costs, from £11.1bn in 2019-24 to £22bn. in 2025-30 o OFWAT’s price decisions represent the largest real price rises in any 5-year period since privatisation. Prices in 2030 will be double, in real terms, what they were at privatisation • OFWAT assumes that the companies will pay off none of their existing debts over the next 5 years – they are expected to replace expiring debt with new, more expensive debt, which will increase financing costs – as well as taking on further debt. • Under any assumption about compensation levels, taking the English and Welsh water companies into public ownership could save £3bn-£5bn in annual financing costs. This could increase new investment, or reduce the average annual water bill by £100-£160 per annum.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.001 | 0.000 |
| Science and technology studies | 0.000 | 0.001 |
| Scholarly communication | 0.000 | 0.001 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".