Reflections 31st May

Building Wider Bridges...

Five miles east of me, eight metres below the surface of a Derby street, runs a brick-arched Victorian sewer that has been carrying the contents of those houses since the 1860s. A small number of engineers can tell you, with reasonable accuracy, what condition it is in. None of them sits in the rooms where decisions are taken about how much money it might receive over the next thirty years.

Those rooms are in Toronto, Sydney, Riyadh, and the City of London. The people in them have never seen the sewer, and will never see it because the sewer exists for them as a row of figures on the regulated asset base of a privatised utility. Between the engineer who knows the pipe and the analyst who allocates the money, the formal apparatus of British water provision runs sixteen separate companies, a sequence of regulators that is shortly to be merged into one, an investment cycle that turns on five-year price reviews, and a debt structure that the National Audit Office has not yet finished mapp…