Turning Failing Water Firms into Not-For-Profit Cooperatives

Labour MPs and regional mayors close to Andy Burnham have urged the prime minister to adopt a “third way” for water utilities: transform them into not-for-profit cooperatives owned and run by local people. The plan, outlined in a Good Growth Foundation report, would first test the model with Thames Water, which is described as “close to financial collapse” and currently negotiating a rescue deal with the government. If a rescue fails, the company would enter a special administration regime (SAR) and, under the proposal, emerge as a cooperative rather than being sold to private investors. The approach is presented as a way to avoid adding the firms’ debt to the national balance sheet while giving customers greater control.

The Guardian

Thames Water has faced repeated accusations of sewage discharges into England’s rivers, rising customer bills, and underinvestment in infrastructure. Creditors are reportedly preparing legal action if a rescue agreement does not materialise, and Downing Street sources have indicated that immediate nationalisation is not on the agenda. The report recommends tighter regulation for all water companies, including bans on dividends and stricter executive-pay limits, with SAR-triggered firms required to convert to cooperative ownership.

The Guardian

• Helena Dollimore – Labour MP for Hastings and Rye, who launched the mutualisation plan with support from environmental group Surfers Against Sewage.

The Guardian

• Tracy Brabin – Mayor of West Yorkshire, vocal about the need for public control after Yorkshire Water’s pollution record.

The Guardian

• Joe Fortune – General Secretary of the Co-operative Party, backing the cooperative conversion.

The Guardian

Andy Burnham has expressed concern that nationalising water utilities could increase government debt, according to Treasury projections. The Good Growth Foundation’s director, Praful Nargund, described mutualisation as a route that delivers public control and long-term investment without burdening taxpayers. The prime minister’s office has signalled that no immediate nationalisation is planned, while creditors are preparing to challenge any failed rescue in court.

The Guardian

• “The people of West Yorkshire have paid the price for Yorkshire Water’s failings for far too long, with repeated pollution failings and hiking bills repeatedly during a cost of living crisis. Greater public control of water companies is the only way to protect our communities and environment for future generations.” — Tracy Brabin

The Guardian

• “Mutualisation offers a different route … It delivers the public control and long-term investment we need without handing taxpayers the bill for decades of failure.” — Helena Dollimore

The Guardian