United Utilities airs nationalisation fears as sector prepares for election
United Utilities has warned that the prospect of being nationalised is a “key area of uncertainty” as the company prepares for the General Election next month.
The company listed the policy, which has been put forward by the Labour Party, alongside Brexit, as one of the potential risks to its business.
“The possibility of ‘renationalisation’ is a key area of uncertainty,” the company said in its half-year accounts.
It added: “In common with other UK companies, a significant issue is the uncertainty surrounding the effects of any Brexit deal that the UK Government may ultimately deliver and the possibility of a no-deal Brexit.”
The utility firm, which covers the north west of England, said its profit before tax rose £4 million to £244 million. This came largely as the company recovered from a £25 million charge it took from extremely hot and dry weather in 2018.
It was also boosted by a £19 million rise in revenue, to £936 million.
“I’m pleased with the transformation we have achieved over recent years – we’ve delivered better levels of service for customers, a more resilient network and real gains in efficiency,” said chief executive Steve Mogford.
“Our focus on innovation, coupled with sustained investment, is helping us to deliver against a challenging set of performance targets, while also protecting and enhancing the environment and supporting our local communities.”
The water sector is looking ahead to a new regulatory period, with Ofwat due to set new demands on the suppliers soon.
In a plan presented to the regulator, United Utilities has promised that it will slash bills by 11%, cut leaks by a fifth, and invest more than £600 million to improve the environment.
However, some sector insiders are worried that the regulator is trying to cut bills at the cost of investment in an at-times creaking infrastructure. A large portion of Britain’s treated water currently leaks into the ground.