The Privatisation and Regulation of the Water Industry
| Date | 01 January 1990 |
| Author | Richard Macrory |
| Published date | 01 January 1990 |
| DOI | http://doi.org/10.1111/j.1468-2230.1990.tb01793.x |
LEGISLATION
The Privatisation and Regulation
of
the Water Industry
Richard Macrory*
Introduction
The Water Act 1989 provides for the restructuring and privatisation
of
the water industry
in England and Wales. By any account, it is a massive piece of legislation running close
to two hundred sections and twenty-seven Schedules. It is a length that reflects what is
to date the most intricate in the programme of privatisations, and one that possesses a
number of distinctive features. Instead of a single nationalized corporation such as British
Gas or British Telecom, the exercise involves ten existing public sector bodies (together
with twenty-seven statutory water companies already privately owned) and, to a far greater
extent than in previous examples of privatisation, the services provided by these bodies
are infused with public health and environmental considerations. There is a powerful
international dimension to the subject, with many aspects of water quality policy now no
longer a matter for unilateral determination by national government, but dominated by
supra-national approaches within the European Community. Furthermore, for the individual
customer the provision
of
water and sewerage services is one that is almost inevitably
a natural monopoly with few realistic means of securing alternative sources other than
by a physical move to another supplier’s area. The privatisation legislation has required
policy-makers to provide legal and regulatory mechanisms aimed explicitly at resolving
these tensions.
Although the Water Act is by no means a consolidation of British water law, its scope
is impressive. In addition to the basic legal mechanisms for flotation and the appointment
and supervision of undertakers (modelled on previous privatisation legislation), the Act
contains substantive provisions covering many aspects
of
water and sewerage management:
the provision of water supply and sewerage services, financial charges for services and
provision of infrastructure, water pollution control, flood defence, land acquisition, and
other aspects of water resource management. Two new public bodies are established under
the Act, the National Rivers Authority and a Water Services Office under the Director
of Water Services. Of all the aspects of the proposed privatisation, it was the environmental
and pollution implications that gave rise to the most sustained concern during parliamentary
progress of the Bill, and the Act has resulted in a fundamental structural change to current
British law in this field. Rather than attempt a complete account of the new legislation,
this analysis will therefore take as its particular focus some of the more significant legal
changes concerning pollution control and environmental management which have now
been brought about by the commitment to privatise the water industry. These are important
in
their own right, but also serve to illustrate a number of more fundamental issues of
contemporary public law and administration.
The Demise
of
Integrated Water Management
The ten regional water authorities that form
the
subject of privatisation in England and
Wales were established under the Water Act
1973.
These authorities took over the former
functions of 29 river authorities, 157 supply undertakings, and over 1300 (mainly local
*Lecturer in Environmental
Law,
Imperial College,
London.
The
Modern
Law Review
53:l
January
1990 0026-7961
78
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