Professor Saal appeared before the House of Commons Environment, Food and Rural Affairs (EFRA) Committee on Tuesday 20 October, providing evidence on the future ownership and regulation of water companies in England.
The Committee has since published its report, calling for significant reforms to address shortcomings in the regulation of the industry. Its recommendations include closing loopholes in pollution reporting, strengthening the independence of the regulator, improving customer protections and ensuring that special administration remains a credible option for poorly performing water companies.
Drawing on more than 25 years of research into the economics and regulation of water and other utility industries, Professor Saal told MPs that improving the sector's performance requires more than a debate about public versus private ownership.
He highlighted the importance of stronger local accountability, greater public involvement in decisions affecting water services and a regulatory system that properly reflects the different needs of individual river catchments.
Professor Saal also argued for fundamental reform of how water companies' costs and performance are assessed, moving away from potentially biased company-level cost assessments towards an approach that better reflects local operating conditions and ensures regulatory incentives support investment, efficiency and environmental improvement at the local catchment level.
"Reforming the water sector is about much more than who owns the companies. We need a system that gives local communities a meaningful voice, recognises the different needs and costs of local water systems and ensures regulation delivers the outcomes that customers and the environment need."
His evidence is particularly timely following the Government's announcement on 5 November of plans to establish eight regional water councils, giving communities, businesses and local leaders greater influence over billions of pounds of investment in water infrastructure.
The proposals, which form part of the Government's wider devolution agenda, would also give mayors additional powers to hold water companies accountable for their performance. They reflect several of the issues raised by Professor Saal, particularly the need for stronger local representation and decision-making that better reflects the needs of different areas. Given this, he would urge policy makers to consider if the establishment of eight highly aggregated regional water councils can really lead to true local accountability in practice.
Water sector reform is expected to remain a significant policy priority over the coming year, with the Government preparing further proposals and legislation on the industry's future regulation, governance and accountability.
As a recognised expert in the economics and regulation of utility industries, Professor Saal's contribution highlights the role that researchers from Loughborough Business School continue to play in informing national policy discussions and supporting evidence-based decision-making on major public challenges.
His engagement also positions Loughborough to contribute further expertise as the Government develops its reforms.
The Committee's report, video of the session and transcript of Professor Saal's evidence are available on the UK Parliament website.