View from City Road: Electric companies facing a shock

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The robust shake-up of East Midlands Electricity by newly installed non-executive chairman Nigel Rudd of Williams Holdings, was a clear sign that the cushy lives of some privatised companies are numbered.

Now there's new evidence that privatisation has done virtually nothing to improve efficiency in the electricity industry. The Centre for the study of Regulated Industries, a think tank for the Chartered Institute of Public Finance and Accountancy, has discovered that there has been no significant improvement in productivity growth in the regional electricity distribution companies since they were privatised.

The findings provide plenty of food for thought as Professor Stephen Littlechild, director general of Offer, the industry regulator, prepares to set a new pricing regime for the companies' distribution activities for the next five years. The present one obviously had no effect at all.