Plans have been unveiled for a new, publicly-owned water system, run by local councils, workers and customers and for “unprecedented openness and transparency” in how the industry will be managed. Building on Labour’s manifesto commitment to bring key utilities back into public ownership, for the first time we have outlined in detail how we’ll do it.
- Labour will transfer ownership of the existing water and sewerage companies to new Regional Water Authorities (RWAs). There will be a clear separation between the oversight and strategic governance – which will be the responsibility of the boards of the RWAs (made up from councillors, worker representatives and representatives of community, consumer and environmental interests) – and day-to-day operational management – which will be in the hands of professional management and the wider workforce.
- RWA boards will have a statutory duty to disseminate information and hold monthly public meetings in different locations each month. Meetings will also be broadcast live on the internet, and all papers will be made public.
- We are simultaneously launching a wide-ranging consultation within the Labour Party, trade union membership, campaign groups and industry experts to help us design governance structures for public utilities that will maximise democratic participation and accountability. The final governance structures for the publicly owned water system are subject to the outcome of this consultation.
- Existing shareholders will be compensated with bonds. The UK legal framework is clear that the level of compensation should be decided by Parliament. This was confirmed by the ECHR in relation to the nationalisation of Northern Rock.
- The new public companies’ financial management will be modelled on TfL –they will continue to be almost completely self-financing from user charges and debt raised subject to an authorised limit based on recurring annual income and cash available to pay financing costs. In March 2017, TfL had ratings of AA from S&P, and Aa3 from Moodys – much higher than any of the private water companies, and close to the rating of the UK government itself. https://tfl.gov.uk/info-for/investors/funding-sources
- All staff will transfer on a TUPE basis in the same roles, except for senior executives and directors, whose posts will be re-advertised on dramatically reduced salaries capped by our 20:1 pay ratio policy
- Full details of Labour’s proposals can be found at labour.org.uk/clear-water
- Labour consultation on democratic public ownership can be found at labour.org.uk/public-ownership
- Professor Prem Sikka and Professor Alastair Hudson’s report on corporate governance can be found at http://visar.csustan.edu/aaba/LabourCorpGovReview2018.pdf