The Public Control Debate in Water

Ownership, control and the trade-offs between them: a Project Introduction 

Public First has been commissioned by Water UK to conduct an independent programme of work examining the question of public control of the water industry, overseen by Paul Johnson. This introductory note sets out the scope of that work and the questions it will seek to answer. The project will aim to conclude by the end of September 2026.

There is an ongoing discussion in Britain about ownership of our water industry, with public trust in the privatised model at an all-time low. Yet the debate is being had at a level of abstraction which avoids the question of exactly what greater public control could mean, who pays, how much, and for what. "Public control" might mean several different things, with profoundly different fiscal, legal and operational consequences: full renationalisation; public ownership with delegated control; or greater public control without ownership.

While the Cunliffe review found no difference in outcomes under different ownership models, the Commission was not asked to examine nationalisation or greater public control. This programme of work will examine the ownership question explicitly, with the same evidence-led discipline. Public First's team of economists will conduct an independent analysis over the summer to:

• Estimate the direct cost of acquiring the companies, alongside a review of cost analyses already in the public domain;

• Assess what different points on the spectrum of public ownership and control would imply for the fiscal rules, PSNFL and available headroom;

• Analyse how nationalisation, or moves toward greater public control, would affect investor confidence across the UK's other regulated markets.

Beyond cost, the work will address the central questions over the value and viability of greater public control: whether it adds to investment or displaces it, whether it improves efficiency, who carries the risk when things go wrong, and what happens to the cost of capital across regulated infrastructure.

The project is conducted independently by Public First, which retains full editorial independence, using publicly available information and sources. Views expressed do not necessarily reflect those of the commissioning body.