Rob Francis, Associate Director at Frontier Economics, today spoke at a conference exploring water industry performance and the regulatory application of cost assessment in the English and Welsh water sector. The conference, held at the Centre for Productivity and Performance at Loughborough University, considered past trends in industry performance and the application of comparative cost assessment methods to determine current relative cost performance.
Rob presented a summary of Frontier’s work for Water UK, published at the end of last year. The report assessed productivity improvements in the English water and sewerage sector in the period since the industry’s privatisation, almost 30 years ago.
The analysis, undertaken in collaboration with Professor David Saal of Loughborough University, found that between 1994 and 2017, productivity grew by 2.1% per year on average, implying total cumulative growth of 64%. Productivity grew quickly after privatisation, followed by a period of intermediate growth in the early 2000s. Productivity growth slowed from 2008, following the Global Financial Crisis (GFC).
The report also found that productivity growth in the water and sewerage sector materially outperformed comparator sectors in the decades after privatisation leading up to the GFC in 2008. While growth in the water sector has since slowed, this was also a trend observed in comparator sectors and in the wider UK economy.
Frontier advises clients on a range of topics affecting the water sector, including quantitative modelling, regulation and productivity growth.
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