It was a privilege to present in Whitstable, Kent, recently to the People’s Commission on Water, whose report is released today.
It relates to a topic that I have thought about for over twenty years, since commissioning a report on non-profit and mutual models in rail and water when I led the New Economics Foundation.

My brief was to set out non-profit and mutual models for water utilities. This is pretty much ruled out by the official review of the water sector by Sir John Cunliffe which argued recently that while companies are expected to have independent directors, there are “limits to how far this is compatible with representation of multiple stakeholders”.
In short, if investor ownership is the solution, then of course non-profit models are second best. But if the goal is a fair, sustainable and affordable water system, then the opposite is true.
We could start with Adam Smith, often associated with market forces, who famously stated that we expect our dinner “not from the benevolence of the butcher or the baker…but from their regard to their own interest”.
However, Adam Smith also recognized that some services are not suited for the private interests of a market. He commended the Turnpike Trusts, which, though private, operated effectively as non-profits, raising funds through bonds and having their toll prices set by Parliament. He also viewed “good roads, canals and navigable rivers” as crucial for breaking up monopolies.
Privatisation is a market solution and it only makes sense where there is a market. When there is only one choice and one provider in a region, it is a monopoly. Consumer choice can drive performance where you have contestable markets. Citizen voice has to be the driver where you are in a monopoly context.
Managing water systems involves many stakeholders but privatisation has destroyed trust, making pollution, such as discharging sewage into rivers, the norm. If the system encouraged it, there are innovative ways to bring people together, such as accelerating wildlife friendly wetlands that can also act as barriers to coastal flooding as sea levels rise.
A mutual model offers several key advantages:
- Reinvestment of surpluses: Profits are reinvested back into the system, improving infrastructure rather than being distributed to shareholders.
- Improved accountability: There’s a greater focus on customers and service, leading to enhanced accountability.
- Long-term strategic planning: Mutuals can stabilize bills over time through strategic long-term planning.
- Stronger environmental stewardship: A mutual model can foster a deeper commitment to environmental protection.
- Improved public trust: By putting the public interest at its core, mutual models can rebuild much-needed trust in water services.
Paris brought its water services back under public control around fifteen years ago with the creation of Eau de Paris. This move was not just a change in management but a fundamental restructuring of governance, placing public participation and transparency at the core of the new water company’s ethos.
Denmark provides a more longstanding real-world example. There, water services are delivered through a mix of state and cooperative water companies. While larger urban areas tend to have municipal utilities, rural water services are frequently run as mutuals. Remarkably, over 40% of the Danish population receives its water from approximately 2,500 water cooperatives. This demonstrates a successful, widespread alternative to the heavily privatized model seen elsewhere.
Of course, there are challenges. Mutuality cannot be imposed from above and it will take time to shift the water system to a more trusted equilibrium. Glas Cymru works on a non-profit basis but lacks enough of an active and open membership that can provide voice and challenge within the governance of the utility. And of course there is a need to clean up a confused system of regulation.
Some combination of state ownership and stakeholder participation is probably the place to start and this is recognised in the initial proposals of the People’s Commission on Water.

Thames Water would then be the first to shift into a new way of working, a tough assignment for a new non-profit model but one that given time would deliver far better results than a failed, propped up privatisation.
The Government has plenty of warm words for co-operatives, but a lot less so far in the way of practical action. Does it have the courage to mark a shift in thinking for the water sector as profound as the chapter of privatisation a generation ago?
By embracing mutual models, we can surface new ideas, get things done effectively, and bring people together around a shared vital resource. The People’s Commission on Water’s report is a crucial step in charting this new course for water in the UK.











