Mayors to hold Yorkshire Water to account as Andy Burnham announces greater public control plans

Andy Burnham has unveiled plans for new laws to pave the way for public ownership of failing water firms, which would see greater public control over Yorkshire Water.

This would introduce new powers for mayors to hold water companies to account and tighten the ban on executive bonuses.

In his speech at the Labour Party conference, Mr Burnham said Environment Secretary Dame Angela Eagle would present a “strengthened Water Bill to Parliament”.

“The centrepiece of that Bill will be this: the repeal of Margaret Thatcher’s ideological ban on public ownership of water companies,” he said.

Mr Burnham told the Labour conference in Liverpool: “Water is a symbol of what has gone wrong with Britain – a service where the shareholders never lose and the public never win, from which some have syphoned out easy money while the public picked up the bill for the sewage in our seas. It stinks.”

He said the new water bill will “start a 10-year journey to a very different water system, it will strengthen public control, mayors will have new powers to hold water companies to account, with tougher consequences for those which repeatedly fail. It will close the loopholes used to pay excessive bonuses”.

“Where private companies serve the public interest, we will support them – but the consequences will be clear for those who do not, including taking back control or ownership,” he added.

Under the current Water Act 1989, there are limits on government ownership of shares in major water and sewerage companies.

These limits vary between 1 per cent and 3 per cent, depending on the company.

South Yorkshire Mayor Oliver Coppard told The Yorkshire Post that this was one of the “stand-out” messages in the speech for him.

“My experience is that the public want politicians who are going to be ambitious for the future and are going to tackle those problems that we all feel every day,” he said.

“Clearly with Yorkshire Water being where they are and how they are, I think we can all sympathise in Yorkshire with a Prime Minister who fundamentally wants to fix that problem.

“That was probably one of the big stand-out policy announcements because in Yorkshire we have suffered for far too long with Yorkshire Water putting up our bills and delivering a worse service.”

The Yorkshire Post recently revealed that Yorkshire Water is expecting to be downgraded to a one-star rating from the Environment Agency after being responsible for 200 pollution incidents last year – a 72 per cent increase.

At the same time, customers’ bills are going up to pay for an £8.3 billion investment programme to improve Yorkshire Water’s infrastructure by 2030.

Despite this, chief executive Nicola Shaw is set to continue to receive controversial £660,000 offshore payments from the firm's parent company into the future.

Ms Shaw has insisted this is not a bonus, despite having not set hours or responsibilities for the role.

However, this appears to be one of the payments that could be within the scope of an extended “bonus ban”.

Ms Shaw had previously indicated that she would be amenable to some form of greater public control.

She said while Thames Water was an “extreme case”, there is scope for different approaches elsewhere in the country - based in part on Mr Burnham’s template for working with United Utilities in Greater Manchester.

Ms Shaw told this paper: “Nationalisation, it is pretty clear, doesn’t make a lot of difference.

“If you look at the Welsh or Scottish businesses, they are owned in very different ways to English businesses and the outcomes are pretty similar. I don’t think that is a key defining feature.

“Control is interesting. In Manchester, the way the city council and combined authority was working with United Utilities was very much in partnership focusing on the goals they wanted to work on together. If we can do that in Yorkshire, that will be really effective for us.”