Drinking water supplies – public or private ownership?

The history of Bristol Water Company

A brief foray into history. During my time in the Welsh School of Architecture at Cardiff University, I was involved in an EPSRC funded project on ‘Transition Pathways to a Low Carbon Economy’. One element of this project was to look at examples from history where large scale transitions in infrastructure systems (e.g. gas, electric, water) had occurred, and to look at how these transitions worked in political and management terms. There were a couple of particuarly interesting things about this. Firstly, examples from history of periods when we have made wholesale changes before can demonstrate how we might do so again; and secondly, the emphasis on how these changes are managed. This is in recognition of the fact that we have many of the technological solutions to climate change available to us, but we often lack the policy and political systems that bring about change.

As part of this, I studied a period in the history of Bristol Water Company. In the early to mid 1800’s, the majority of water supplies were privately owned. However, in the second half of the 19th century, almost all water supplies were bought by local councils, and were in public ownership until the 1980’s. Bristol Water Company is one of only a handful that remained in private ownership, despite repeated attempts by the council to purchase it. By studying the original minute books from meetings of both the council and the water company, ancillary sources such as newspaper reports from the time and secondary literature, I uncovered a complex mix of personality, politics and financial pressures that allowed the company to resist purchase attempts.

Politicians often talk about whether public or private ownership is a better model. There are some industries, known as ‘network industries’, where the whole is greater than the sum of it’s parts. These are industries where the connections between elements are as important, if not more important than each element itself. This is true of water supply, gas, electricity, phone systems, road infrastructure, the railways etc; it is the connectivity that allows the system to function. Network industries have particular features that mean that private ownership can cause problems. The most critical is that there is a tendency towards monopoly; if a single company owns the water pipes, there are high barriers to entry for potential new providers, since they would need to install signficant infrastructure in order to compete. Having a monopoly will obviously affect pricing, and it could also be argued that ‘public good’ services such as water should be managed in the public interest, as opposed to in the interests of shareholders. Indeed in Wales, this is what we have; whilst the UK water industry was privatized in 1989, Welsh Water was then set up as a not for profit company (a similar system to pre-privatisation, and as still exists in Scotland). So whilst I don’t much care whether a widget factory is in private or public ownership, I think there are strong arguments in favour of public ownership of network industries.

The journal paper on the history of Bristol Water Company is available here.

Thornton, J. & Pearson, P. Water Hist (2013) 5: 307. Bristol Water Works Company; a study of nineteenth century resistance to local authority purchase attempts. https://doi.org/10.1007/s12685-013-0083-1

 

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