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Sir Ian Byatt

(Elected 2005)


Sir Ian Byatt is former Director General of OFWAT – the Office of Water Services for England and Wales – a post he held between 1989 and 2000.

In 2005, he was appointed to the position of Chairman of the new Water Industry Commission for Scotland. One of the first jobs of the Commission is to review water charges from 2006–10.

At Birkbeck Sir Ian served on the Board of Governors as a co-opted Governor from 1997 to September 2005. He was also Chairman of Birkbeck’s Finance and General Purposes Committee between 2001/02 and 2004/05.

Sir Ian has an active history in the world of academia. A former Commonwealth Fund Fellow of Harvard (1957–58), he held the post of economics lecturer at two higher education institutions: the University of Durham and the London School of Economics. As senior Treasury advisor to the Water Industry Commissioner since 2002, he is an expert on state monopolies before privatisation, and has published several policy documents and articles on public services for official reports and learned journals.


President, Master, Graduands and Guests.

Ian Byatt was born in 1932 and educated at Kirkham Grammar School in Lancashire. He studied Politics, Philosophy and Economics at St Edmund’s Hall, Oxford. Following his first class degree, he undertook a DPhil at Nuffield College, completing in 1962 his thesis on the early development of the electrical industry in the late nineteenth and early twentieth centuries. After a year at Harvard as a Commonwealth Fund fellow, he was appointed as a lecturer in economics at the University of Durham, moving to a post as Senior Lecturer at the LSE in 1964. Samuel Johnson famously said that he would have liked to have been a philosopher, only cheerfulness kept breaking in. In a similar way, Sir Ian might perhaps have liked to have remained an academic economist, if only opportunity had not kept cropping up. In 1967, he joined the Civil Service, as Senior Economic Advisor to the Department of Education and Science, in which year he served on the Central Advisory Committee of the Plowden Report on Children and Primary Education. Stints followed in the Ministries of Housing and the Environment.

In 1972, he moved to the Treasury, to become Under Secretary. Here, he was in charge of the public sector economics group, and was occupied in formulating economic advice in the controversial area of public spending, as well as in working out the difficult details of running nationalised industries. In 1978 he was appointed as Deputy Chief Economic Advisor to the Treasury, being chosen after the job had been advertised for open competition for the first time.

Sir Ian continued to focus closely on the best use of public resources. In 1982 he chaired a group that questioned the effectiveness of large Government subsidies to exporters. In 1985 he chaired a committee which produced a controversial but also influential report, which became known as the Byatt Report (the first, for there was to be another), on principles of accounting in the nationalised industries, which urged that proper account be taken of inflation and other price changes.

The late 1980s saw the privatisation of a number of public utilities – gas, water, electricity and telecommunications, which brought the need (paradoxically as it seemed to some) for new forms of regulation to ensure efficiency and accountability in the new private companies working on the public behalf. Ian Byatt was appointed Director General of the newly-created Office of Water Services, or OFWAT, in 1989, causing a predictable welling up of aqueous puns in the press about buoyant prospects, revenue-streams, share-flotations and the flushing out of inefficiency, As head of a Treasury team working on the regulation of public utilities he was eminently well-qualified for the job, and said at the time that he saw it as the practical culmination of the work he had been doing in the Treasury. He inaugurated his period of office by undertaking an exhausting grand tour of all the 39 water companies for whose regulation he was responsible, right the way down to the smallest of them all, the Cholderton and District Water Company near Salisbury, which supplied water to a couple of villages within a private estate and was run by a man and his wife.

It was Sir Ian's job to oversee and maintain the new climate of financial and environmental regulation of privatised industries. The increased concern for the environment produced a further set of priorities and demands (as Sir Ian has recently written ‘Green can be an expensive colour’). He had to tread a fine line between the interests of the investors in the newly-privatised water industry and the customers for its product. On the one hand, it was his responsibility to monitor performance to make sure that customers were protected from unjustified price increases and deteriorating standards. It was down to his office – of scarcely 100 staff – to ensure that water companies undertook the programmes of improvement for which they were responsible - in quality of service (water pressure, interruption of supply and foul flooding), drinking water quality, and improvements in sewage disposal. But he had also on the other hand to ensure that the water companies were operating in a rational and well-run manner that enabled them properly and sustainably to fund their activities.

So, over the decade or so that he was Director General, he would have to encounter pressure and criticism both from shareholders anxious for returns on their investment and from consumers wishing to get their water as cheaply as possible. Inevitably, over a period such as this, and during a period in which water prices became strongly politicised, things swung both ways. It took a man of singular resilience to survive the games of political badminton that were played with him and his office during the 1990s. Nevertheless the long view shows the very considerable progress that has been made in this most vital public utility. By the time he stepped down in 2000, water and sewerage companies are investing nearly three times as much as they were during the period of nationalisation in the 1980s, enabling substantial improvements to water quality and conservation. Since its peak in 1994-5, for example, water leakage has now fallen by a third. Meanwhile, prices have risen by only 34% since 1989. Ian Byatt services to the industry and country were recognised by a Knighthood in 2000.

In that year, he became a Senior Associate of Frontier Economics, one of the largest economic consulting forms in Europe. In July, he was invited to chair a taskforce to review local government procurement in England. Its report, entitled Delivering Better Services for Citizens – the second Byatt Report to which I referred earlier – appeared in June 2001. Its recommendations, which were widely approved, stressed the importance of making procurement – which, as the report stresses, is not just about ordering paperclips, but covers all aspects of how local authorities go about purchasing goods and services – integral to local government planning and operation. Earlier this year, he was appointed as chair of the newly established Scotland Water Industry Commission. The Commission will operate independently of Ministers to identify the lowest reasonable overall cost at which Scottish Water can deliver its objectives.

Sir Ian has also found time to lend his skills and inspiration to other groups and institutions. Among them is this college. At Birkbeck Sir Ian invaluable service to our Board of Governors from 1997 to September of this year. His financial astuteness and experience made him the best possible Chairman of Birkbeck’s Finance and General Purposes Committee between 2001–02 and 2004–05.

During the 1980s, he served on the Council of the Royal Economic Society, a professional association promoting the encouragement of the study of economic science in academic life, government service, banking, industry and public affairs. Since 1993, he has been Vice-President of the Strategic Planning Society

Nor are his interests confined to economic or political areas. He was a founder member of the Holy Cross Centre Trust, which worked to help vulnerable people, especially those with mental health problems, in the King’s Cross area of London. When he moved to Birmingham in the early 1990s to set up OFWAT, he became involved in local initiatives in the Midlands. He has been Chairman of the Friends of Birmingham Cathedral since 1999. Since 1999 he has been president of the Human City Institute, which encourages the formation of sites, such as offices, hospitals, schools, businesses, where efforts can be concentrated on helping to create a more human experience and understanding of the city.

When he has time off, he likes to paint – abstract paintings which he has described as ‘full of secret meaning that only I can disentangle’, which casual cynics might think an appropriate enough occupation for an economist. In fact, however, Sir Ian’s outlook as an economist and former of public policy has always been practical and externally-focussed rather than esoteric. He writes with clarity, balance and penetration, and is able to dramatise vividly issues and arguments which in the hands of others might become aridly inaccessible.

Sir Ian is no stranger to this kind of ceremony, having previously been awarded Honorary Doctorates from Brunel University and the University of Central England and a DSc from the University of Aston. It is a great pleasure to acknowledge his life of public service and return in some small measure the debt we owe him as a College, as we welcome him as a Fellow of Birkbeck.