• Regulation

• The Guardian claims that this is all part of a pattern and “the latest evidence that the regulatory regimes that oversee large parts of the British economy are failing.” The article points to problems caused, or not addressed, not only by Ofwat but also by Ofgem and the Rail Regulator.  (In the last case, the name “Ofrail” was avoided for some reason.) “Consumers or taxpayers or both will have to pay the cost of these failures,” the overview concludes.

Regulation is a tricky one. In many ways it runs directly contrary to the natural instincts of capitalism. Regulation involves preventing certain practices from happening, which generally leads to various degrees of evasion. An analogy might be water – we don’t seem to get away from the stuff – which wants above all things to run downhill. Dams, ditches and all the rest can be put in place to slow or divert it but if these are not constantly monitored and maintained, the water will find a way round them. Money behaves in a very similar way.

Another article in the same paper, written on 28 June, suggests that the government (and so, one assumes, Ofwat) “has “no true grasp on the costs” involved in preventing a collapse of Thames Water. Ofwat’s CEO David Black disagreed with a suggestion on BBC R4’s Today programme on 5 July that his organisation had failed to regulate the water companies effectively but conceded that there were “hard lessons to learn” and that customers’ bills would probably need to rise.

There’s also the question of where Thames Water will raise its money from. Reuters claims that “Universities Superannuation Scheme (USS), one of the largest investors in Thames Water, has given its support” for the water company. However, it’s hard to believe that this latest news is going to make it any easier to come up with the money needed to service the debt, never mind perform all the investment that’s now required.

Investment is certainly needed: and not just by TW. Indeed, in 2022, Thames Water was actually the best-performing English water company as regards discharges, pumping for “only” 76,693 hours. The combined sewage discharge from all the water companies that year lasted 1.8m hours: if all this was coming out of one pipe, it would have started shortly after the battle of Waterloo and only recently finished. As for the combined debt, that’s about £54bn, roundly £1,000 for every person in England. All in all it doesn’t look like great regulation to me.

One model that might be looked at – though it’s probably rather later in the day – is that of Dwr Cymru which proclaims on its website that “we’re the only water company of its kind in the UK. We don’t have shareholders, which means we put every penny back into looking after your water and our beautiful environment – now and for years to come.”

• Fines

One of the things that water companies need to provide for is fines. Thames Water, for instance, was recently handed a bill for £3.3m for allowing pollution to leak into the Gatwick Stream and River Mole in Sussex. The Judge spoke of how Thames Water’s number of previous convictions (including one that resulted in a £20m fine) were “extremely serious”, adding that the company “should have put in every effort into tidying up the problem areas.” A spokesperson for the Environment Agency said after the verdict that Thames Water “missed several opportunities” to prevent the pollution from happening and did not provide “vital information” when requested by the regulator.

If this were you or me hauled up before the beak for the umpteenth offence and accused of obstructing an investigation, we’d probably be looking at a custodial sentence. £3.3m – or even £20m – is a great deal less than the cost of fixing the problem and these kind of sums the water companies are quite happy to pay. I doubt there’s much reputational damage. The shareholders can be shown that this is a more profitable expedient than wholesale repairs: as for the customer, where else are we going to for our water? It’s as if a local restaurant were found guilty of serious hygiene breaches and given a fine equating to a fraction of day’s turnover but coupled with no obligation to fix the problem. Or, imagine this was a company dealing not with water but with oil or gas pouring out of the pipes. How long would we put up with any of these scenarios?

The more of a monopoly an organisation has, the more tightly it should be regulated. We have the reverse system. Financial services, which seem to be regulated up to the hilt, provide thousands of separate investment opportunities. With water and the railways, where no competition exists at all, the regulation seems unable to prevent massive leaks and insanely complex ticketing arrangements; and, in both case, financial failure or the risk of it. This then risks causing exactly the central intervention that the whole privatisation process was designed to avoid.

It’s also worth mentioning the incident in Sussex took place in October 2017, back in the days when £3.3m was £3.3m. As well as providing a get out of jail card, the system is also very slow. The First World War was sorted out more quickly than this.

I therefore decided to have a “chat” with a Gov.uk post…

So, how many such fines have there been?

“Water companies were handed a record amount in fines for pollution incidents in 2022 as part of ongoing action to hold rule-breakers to account,” Gov.uk replied. “Since 2015, the Environment Agency has concluded 56 prosecutions against water and sewerage companies, securing fines of over £141m.

And what happens to the money?

“At present,” the document replies, “money from fines imposed by Ofwat and those arising from Environment Agency prosecutions is returned to the Treasury.”

That doesn’t seem to make much sense. £141m has thus been removed from the sector over this period. This is a small part of the turnover and the debt but it would all help. It seems, though, that this might change.

“Under the new plans,” Gov.uk goes on, “ringfenced funds will go to Defra and will be invested directly back into environmental and water quality improvement projects. This could include initiatives to restore our water environments by creating wetlands, re-vegetating river banks and reconnecting meanders to the main channel of rivers.”

Well, that seems a bit better. When will this happen?

“Further details on the plans will follow next year (2023),” Gov.uk concludes. That’s just the detail of the plan, mind, not the implementation. I haven’t been able to discover where matters currently rest on this. If anyone knows, please get in touch.

So, what we have now is a situation where, despite what Ofwat’s boss has said, regulation has on most levels failed. The companies are failing environmentally and, increasingly, financially and the latter works against the chances of improvement for the former. A system of prosecutions and fines exists which, as well as being slow, provides a fairly inexpensive consequence for the infractor and locks companies and regulators alike into adversarial relationships which encourage evasion and litigation.

• Hybrids

• For most of us, virtual meetings have now become the norm. Zoom managed to acquire in a few months what it took Hoover, Velcro, Photoshop, Sellotape and a few others a generation to accomplish, that of making a brand name serve as a generic term and get used as a verb.

For councils, however, entirely virtual or hybrid meetings were a brief expedient between late 2020 and early 2021. Then, Whitehall decreed that these were no longer appropriate and that all meetings which involved votes (as most do) could only proceed in person: or, at least, would otherwise be open to legal challenge.

Perhaps the problem here is that our parliament has one of the most archaic voting protocols in the world and so it was felt this should be inflicted on the rest of us. The hours of sitting are very anti-social with many important debates happening late at night. MPs are, however, paid (£86,500pa) for this inconvenience and can, fairly or not, also claim expenses.

Most councillors are not paid. At a district, county and borough level they receive allowances but they’re not that spectacular. West Berkshire’s basic allowance for its members is less than £8,300pa. This can be topped up with expenses for certain outgoings and also for additional responsibilities, such as being on the Executive, but even the highest remuneration falls some way short of what one could earn at an Amazon warehouse, particularly given the number of hours and level of responsibility.

In a rural district, travelling around the ward eats up time and money. Councillors are encouraged to attend town or parish council meetings, and it’s a good thing if they do. They do not, however, get any travel allowance for this. There’s generally only a small part of a TC or PC meeting when the ward member’s presence is important: delivering a report, answering questions about it and discussing any call-ins for planning applications are the most common. When they could zoom, these could be dealt with in twenty minutes without starting the car up.

The same was true of the local MP. I virtually observed several PC meetings in this time at which Laura Farris logged on, listened, said her piece and then zoomed out. There’s no way a busy person like her is going to do a perhaps fifty-mile round trip for this. With virtual meetings she could.

It’s also a lot easier for people like me. West Berkshire Council’s meeting are all now live-streamed (although members can’t vote if they’re only present virtually) but most parishes no longer do.

None of this serves the interests of local democracy that well, although this is not something Whitehall seems to regard as important. On 29 June, Local Government Lawyer reported that “the overwhelming majority of councils (95%) surveyed by the Local Government Association (LGA) want the powers to be able to reintroduce virtual and hybrid technology for statutory council meetings.” The report found that “one in 10 councils surveyed had a councillor who had stepped down in their authority since May 2021 due to the requirement for them to attend council meetings in-person.”

It’s hard enough to get councillors to serve as it is. Putting these kind of obstacles in their way is only making matters worse. There’s no logical reason for it. After all, some of the abominable decisions taken by councils like Croydon, Thurrock and Slough were done in-person. Physical participation is clearly no guarantee of good decision-making. And speaking of which…

• Section 114s

These are effectively notices of bankruptcy which a council issues to the government. The above-mentioned councils – Croydon more than once – are the highest profile instances of this but there are others. More may follow.

In broad terms, the problems started in earnest in the early 2000s when councils found their income squeezed and were forced to adopt risky investment programmes. Some of these were exposed in the 2008 financial crisis but a further period of austerity encouraged gambling in a property market of which they had little experience to balance their books.

An additional temptation was setting up housing companies to try to redress the accommodation crisis which many were experiencing. Cheap money for investment derived mainly to produce profit, rather then local benefit through the Public Works Loan Board has recently been tightened up: but the damage had been done.

The result, as the Rotten Boroughs section of Private Eye has been chronicling for some time, is a series of financial car crashes. In these the councils themselves can perhaps be cast, not as out-and-out villains but rather as figures of high tragedy like Macbeth, Lear, Hamlet or Othello who found themselves thrust by outside forces into circumstances they were unable to control and which ended badly.

Perhaps I’m being too kind to organisations like Thurrock Council which, as reported in Private Eye 1601, in 2017 agreed to increase the cash limit for council officers to make external deals under delegated powers (ie without much in the way of councillor scrutiny) from an already remarkable £75m to £425m, increased in 2019 to £750m.

Councils are up against it financially at present. In many cases, regular funding from Whitehall has been cut. Council tax rises are effectively capped. Business rates are limited to what corporate residents can be squeezed for. Some councils have other sources of funding such as from visitor attractions or parking permits but others do not. Top-up payments can be achieved by participating in a series of financial beauty contests organised by central government which amount to a form of micro-management. Mutual distrust is the main result of all this.

Local councils, including West Berkshire, generally performed a lot better in the pandemic than did Whitehall. They aren’t, however, funded properly, consistently and equitably. More and more is being expected of them, including implementing regulations on matters ranging from social care to planning, all against an uncertain backdrop of ever-changing or delayed policy reforms. Interest and inflation rates are rising. The housing and social-care crises are deepening. Is it any wonder that councils have been driven to extreme measures, often beyond their competencies, to try to address these? Expect more S114 notices if things carry on this way.

• And finally

• Why does the woman’s Ashes series have only one test match whereas the simultaneous men’s series has five? It’s certainly not because the women aren’t good enough, or that there’s a shortage of grounds or of popular interest. The one women’s test this year was, for much of the match, as compelling a cricketing spectacle as I’ve seen. When will this change?

• We all remember the Covid hero Captain Tom Moore who raised all that money for the NHS in the months before his death in February 2021. Now his relatives have got involved in what seems to be an unseemly spat with Central Bedfordshire Council which has order that a spa building erected on the site of his home, which has some connection with the charity founded in Captain Tom’s name, be demolished. This is subject to appeal, as such matters always are. I’m not sure where the rights and wrongs sit here: but retrospective planning permissions are always divisive, perhaps particularly in this case.

The Foundation’s website says that “every penny” has gone to NHS Charities Together. The Guardian alleged that in June 2022 “the Charity Commission began a series of discussions with the foundation amid concerns about the way it was governed, which escalated into a full inquiry after fresh evidence emerged of potentially serious misconduct.”

Sky news went even further, claiming that “in its first year just £160,000 was given away in charitable grants, while £240,000 was spent on management and fundraising costs.” It’s not a great look. Captain Tom did something quite remarkable to tap into the national sense of collectiveness that the darkest days of the pandemic created. Whatever the rights and wrongs of this squabble, I doubt he’d have wanted things to go this way.

• The government has lost its appeal which tried to prevent ex-PM Johnson’s complete WhatsApp messages from being handed over to the Covid enquiry. A spokesperson for Covid-19 Bereaved Families for Justice UK group, said that the “judicial review was a desperate waste of time and money. A successful inquiry could save thousands of lives in the event of another pandemic, and it’s a disgrace that the Cabinet Office is trying to obstruct it.”

This does not mean that all of BoJo’s messages will be publicly available as even any that are published may be redacted. They should, however, be a lot more secure than the ones that Matt Hancock mysteriously handed over to the journalist Isabel Oakshott.

• Meanwhile, the man himself is being paid a stupidly large sum of money to write a column for a national newspaper, I forget which. In the first one, he explained at some length that if you constantly snack from the fridge you tend to put on weight (something I saw expressed much more succinctly on a fridge magnet that said “fridge pickers have bigger knickers”). In his second one, he admitted that the Titan’s fatal journey down to the wreck of the Titanic was “risky”. It’s as well that he’s is recording these stunning insights so they aren’t lost to future generations.

• The BBC reports that the Metropolitan Police is reopening an investigation into breaches of Covid regulations at a Christmas gathering at Conservative Party HQ, the so-called “jingle and mingle” event. What seems really sad to me is that some of the participants video-ed it, which is how the whole thing has been exposed. Either the participants thought it didn’t matter that the thing was recorded and therefore shared; or that they couldn’t believe, so vitiated have their memories become, that they participated in an event unless they could see it on film. I don’t know which I find the more depressing…

Across the area