Turn failing water firms into not-for-profit cooperatives, MPs and mayors tell PM
📰 source: theguardian_business · 💼 business
mps and mayors close to andy burnham have told the prime minister there's a 'third way' for failing water firms: turning them into not-for-profit cooperatives. the plan, backed by a good growth foundation report, would avoid the debt risk of nationalisation while still giving public control. it could be tested first with thames water, which is close to financial collapse and in talks with the government over a rescue deal.
the proposal includes tougher regulation, a ban on dividends unless performance targets are met, and a 'bail-in' mechanism so shareholders and creditors bear failure costs, not taxpayers. companies coming out of special administration would become cooperatives rather than being sold to the highest bidder.
supporters include mayor of west yorkshire tracy brabin, south yorkshire's oliver coppard, and mp helena dollimore. brabin said west yorkshire has paid the price for yorkshire water's failings with pollution and bill hikes. coppard said water shouldn't be farmed out to the private sector. downing street says no immediate nationalisation of thames water, and creditors are gearing up to sue if the deal fails.
why it matters: plan to mutualise water firms could rescue thames water without adding government debt, but creditors may sue if deal fails.
source: theguardian_business
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