Privatization of water companies in the United Kingdom was brought about by the Water Act 1989, which brought the 10 existing regional water authorities under a system of regulation based on rate control. The benefits of privatization include increased capital expenditures, better water quality, and greater security of supply. Relationships between managers and employees have become less rigid, and more employees feel there is better chance of reward for good work under the new system of operation. Includes 3 references.