A slap on the wrist

It is a repetition of the now traditional Ofwat equivalent of a slap on the wrist to companies that ought to be in the dock for fraud.

The directors responsible for such behaviour should also be removed and barred from holding directorships because of manifest unfitness to fill such posts.

They have not solely been found guilty of sheer incompetence, although years of substandard customer service testify to this.

Their crime amounts to conspiracy to falsify company reports to Ofwat in order to boost the level of price rise that the regulator will allow, thereby swindling customers and boosting shareholder dividends and boardroom bonuses.

If that doesn't come into the category of deliberately planned fraud, what does? But, as usual, as with Northern Rock's financial adventurism and Southern Water's similar fictional reportage to Ofwat, it's not the fault of the current board.

Once again, it was those other big boys who did it and then ran away, wiping the slate clean, leaving the ill-gotten gains secure in directorial and shareholder back pockets and paying out a token fine, almost a licence fee, to continue riding on the gravy train.

The fact that Severn Trent and Southern Water have both been shown to have organised deliberately to misled the regulator would seem to suggest that both companies identified this mechanism as a simple way of rigging the regulation framework.

And, if both these companies did it, were they alone in it or is this regarded as standard practice in the industry?

Since the Tories began selling off the public sector at knockdown prices in the 1980s - a process that has even accelerated under new Labour - one financial scandal after another has cropped up in the privatised companies. And why should anyone be surprised at that? The private sector prioritises corporate profit not public service.

And while the privateers were able to fill their boots very successfully in the earlier years of privatisation by sacking large numbers of staff and selling off underpriced property, including land resources, the quest for ongoing profit maximisation has called for less orthodox methods.

That's why open fraud is now part of the privatisation agenda. The Labour government has swallowed hook, line and sinker the whole saga about private managerial efficiency as opposed to supposedly flabby, ineffective public bureaucracy.

It has even assisted the water privateers by making overseas aid dependent on poor countries accepting their "assistance" in reorganising and "modernising" their water industries.

Yet it remains silent in the face of blatant fraud in our own country, other than the usual guff about supervision being the responsibility of Ofwat, and it plans to trust the water privateers with monitoring their own effects on the environment.

The government cannot escape its responsibility. It allows private companies to operate a natural monopoly, which is bound to bring about exploitation, waste and corruption.

Regulation of the water companies is a myth. Only a return to public ownership will see improved water standards, better service and cheaper bills.