Turn failing water firms into not-for-profit cooperatives, MPs and mayors tell PM
Labour politicians say mutualised model puts public in control without adding debt to government’s balance sheet MPs and mayors close to Andy Burnham have told the prime minister there is a “third way” to gain more control of failing companies, as the row over whether or not to nationalise Thames Water rumbles on. Burnham is said to be concerned about the increase in government debt that Treasury…
Labour politicians and local mayors are urging Prime Minister Andy Burnham to transform failing water companies into not-for-profit cooperatives, rather than nationalising them, in order to maintain public control without increasing government debt. Burnham has previously expressed concerns about the potential debt implications of nationalising water firms, which have been polluting England's waterways while raising bills and neglecting infrastructure.
A report by the Good Growth Foundation suggests a mutualised model, where water companies are run by local people, could address these issues without burdening taxpayers. Burnham has shown support for such models, and the Labour MP Helena Dollimore has called for the end of "extraction" in the water industry. The report recommends testing the model with struggling Thames Water, which is close to financial collapse, and imposing stricter regulation on the entire sector, including enhanced monitoring, tighter executive pay limits, and a prohibition on dividends without meeting performance targets.
Companies failing under these conditions would be placed under temporary government control, or special administrative regime (SAR), and later converted into cooperative models. The plan would prevent water debts from piling up on the government's balance sheet and give customers more control over business operations.
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