Infrastructure and Public Ownership

Scottish Water is a big success story that I am proud to promote in my professional life. Its public sector existence means it can buy into social and environmental objectives, set by Ministers, without conflicts of interest with shareholders.” 

Sarah Hendry is an academic lawyer specialising in environment and water, and has a keen interest in management of natural resources, the development and implementation of environmental law, and the delivery of water services at home, in Europe and round the world. On her work-related travels, Sarah comes across many people interested in the Scottish referendum. She hopes that an independent Scotland could lead the way in developing fairer and more equitable approaches to the use of resources, natural and human.
She writes here in a personal capacity, but informed by her work in these areas.

Yes Cafe Nov 13I was at the ‘Yes Café’ on Saturday, and much enjoyed the talks and the debate. It was good to see the hall full! Thank you to all the organisers.

A couple of things struck me as I was listening. Firstly, on infrastructure and public ownership. One of the few public services that wasn’t privatised under Mrs Thatcher was water services in Scotland. Scottish Water is sometimes criticised as being too ‘corporate’, but overall we are doing much better than the current scandal in the water companies in England.

Scottish Water operates within a regulatory system that controls prices and achieves delivery of core services to most of the population, at affordable prices for most people, whilst meeting environmental objectives both for raw water and wastewater treatment. I work in water, and compared to many countries and many models of ownership and governance, Scottish Water is a big success story that I am proud to promote in my professional life. Its public sector existence means it can buy into social and environmental objectives, set by Ministers, without conflicts of interest with shareholders.

In England, the regulatory model has struggled to cope with the power of the market; companies manipulate the regime and the shareholders are getting dividends well in excess of the global norm in the industry, even in other places where there is private sector participation. So Scottish Water is a good example for us in several ways; it demonstrates the advantage of keeping public services in the public sector (or bringing them back); and it shows that public utilities can be regulated to be efficient, whilst meeting wider objectives in the public interest.

The second thing was about sharing of resources and rewards, and was prompted by the lady who asked a question about Denmark.  Denmark is one of the countries that moved very quickly to adopt wind power, and also, importantly, ensured that the benefits were shared via community ownership. Now we all know that there are issues with wind power, and indeed in Denmark there has been some negative commentary and analysis in more recent years (as the turbines have got bigger, so have the companies involved). However, there has been considerably higher public acceptance of wind farms because the public has had a greater benefit, (whether rent for land, or payments from the grid) and there are lessons here that we can take for other resources and assets.

The current government issued a paper a few years ago about the Crown Estates, for example, and we might want to think about how that vast resource could work for our benefit. If all the leases, from oil installations to fish farms, were directly benefiting the communities where they were located, that might change peoples’ perceptions of
these sorts of developments.

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