Will Hutton and Andy Haldane propose transforming utility companies into public-benefit entities that prioritize delivering high-quality services, with profitability taking a back seat to this overarching goal. Although Andy Burnham discusses the concept of ‘public control’ over utilities, navigating this issue is complex. Hutton and Haldane’s idea suggests retaining the corporate structure while shifting the focus from profit to public interest. However, this remains an inadequate solution.
Utilities ought to be managed not as profit-driven businesses, but as vital public services. Their operations cannot be isolated from the broader community, and business models do not align with their essential role in serving the public good. These entities bear social, environmental, and economic responsibilities that must be upheld. Historically, prior to the establishment of the Scottish Parliament, local governance in Scotland effectively operated within a structure of regions and districts, which managed a variety of functions—water and sewage management included—at a regional level.
The current government seems to be moving towards a framework involving metro mayors and collaborative efforts for governance in urban areas. This approach should be formalized to encompass a comprehensive set of responsibilities, powers, and resources dedicated to strategic planning, economic growth, education, health services, transportation, infrastructure, and environmental management, including water and sewage systems.
For instance, capturing and recycling urban rainwater for cooling purposes has been a common practice in southern Europe for centuries. Such methods should be adopted in northern regions to aid in wildfire prevention. It raises the question: how can such critical needs for urban cooling and wildfire management be effectively addressed under a profit-driven model?
If the current water companies in England find themselves with liabilities surpassing the value of their assets and are unable to fulfill their legal obligations, it is challenging to justify their continued support through public funding.
Roger Read, former secretary general of Metrex, argues that Hutton and Haldane present a weak case for preserving private ownership of utilities. They fail to provide a fair comparison by overlooking how the situation was when water utilities were publicly owned, instead referencing dubious examples of failures in other nationalized sectors.
In fact, the UK, alongside Chile, stands out globally for having a completely privatized water industry. Are other countries truly out of line with this model? asks Sally Thompson from Cardiff.
Hutton and Haldane’s insights on public control could extend to all essential services, from utilities to healthcare providers. While many who have experienced the inefficiencies of postwar nationalized industries would prefer not to revert to that model, a simpler solution could involve legislating that all essential service providers be required to register as companies on the London Stock Exchange.
Further legislation could also impose limits on profit margins and borrowing capacities—two crucial indicators of corporate behavior. Such measures might encourage public investment in these companies, similar to current investments in the National Grid, argues Ian Graham from Port Carlisle, Cumbria.
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