Report: Utilities generate £10bn extra investment in the North
THE foreign-owned utility firms that supply electricity, gas and water to the North of England will launch a new report claiming they are driving economic regeneration through £2bn worth of investment a year.
Northern Gas Networks, Northern Powergrid, Yorkshire Water and Northumbrian Water commissioned research showing that for every one pound they invest, a ripple effect of 87p extra spending is created.
The Infrastructure North report claims that over the next five years, the firms will generate additional investment of £10bn in the North.
Utilities typically borrow from international money markets to invest in infrastructure and charge a premium to customers, generating healthy profits and dividends for their owners.
Two of the companies, Leeds-based Northern Gas Networks and Northumbrian Water, are owned by Hong Kong’s richest man, Li Ka Shing.
Warren Buffett, the so-called Sage of Omaha and one of the richest men in the world, owns Northern Powergrid, while a consortium of international banks and investors owns Bradford-based Yorkshire Water.
On reading the report, James Wharton MP, Minister for the Northern Powerhouse, said: “I’m very pleased to see collaboration - the key lifeblood of the Northern Powerhouse - between these companies to align plans for growth and invest in long-term solutions. I’d welcome further collaboration with other companies across the North to extend this good work.
“I commend these companies for the way they are helping to sustain economic growth in the north, and improve the health and wellbeing of their regions.”
More than 50 MPs are expected to attend the launch of the report at the House of Commons on Monday. It was carried out by Edge Analytics, a Leeds-based demographics specialist.
England’s most northerly MP, Anne-Marie Trevelyan, the Conservative member for Berwick upon Tweed, is sponsoring the event.
She said: “We have an expectation that when we turn on our taps that water will come out, turn the central heating on and our homes will become warm or flick a switch that the lights will come on, and rightly so.
“But as we will hear it is time we as leaders be more mindful of how we can work with those who supply our energy and water to make sure our investments get the best outcomes for our communities.
“Clearly together we can make our region even stronger.”
Richard Flint, chief executive of Bradford-based Yorkshire Water, said: “As four of the biggest utilities in England, we’re really proud of this report which shows that we don’t just provide a service to our customers; we also pump billions of pounds into the local economy.
“Although we are beginning to see signs of economic growth, we understand that affordability is still a big issue for our customers.
“We are committed to keeping costs down for our customers and bills will be reduced in real terms over the next five years.
“A joint approach means we are also best placed to offer additional support to the more vulnerable members of our society.”
Tom Fielden, finance director of Northern Powergrid, said the four companies have made a significant economic impact since their last report two years ago.
He added: “There are now 40 per cent more businesses in our supply chains with 33 per cent more within the North.
“1,000 more jobs have been created and our commitment to our communities has strengthened further, with 30,000 volunteering hours over the last year, 49,000 children reached through educational visits and 1m visitors to recreation sites.
“We are investing £2.16bn each year in the region to ensure customers continue to receive a high quality and reliable service.
“This investment is a key part of developing the northern economy as part of the Northern Powerhouse to rebalance growth across the regions in the UK.”
The companies might provide different services, but they are facing the same challenges of population growth, climate change and affordability.
It is time we as leaders be more mindful of how we can work with those who supply our energy and water to make sure our investments get the best outcomes for our communities