In the UK utilities used to be owned and managed by the government, from Gas, Electricity, and Water to Railways and even the motor industry. 

This model was based upon socialist ideals where the government could run the businesses for the betterment of the country as a whole—reducing costs of these essential services to the population and ensuring that the business investment was concentrated in areas of most need. 

The problem is that business and government do not work well together. Companies want to invest large sums of money in places where they can maximise their return. Governments want to reduce costs to the taxpayer whilst increasing the return in areas where investment is needed. 

This results in businesses being underfunded by the government and unable to raise their own funding to grow the business without the government dipping into its tax income. 

The great sell-off

Privatisation was a long process which started in 1979 with the then Tory government selling off profitable businesses to reduce the costs to the government, but mainly to raise funds for the UK government which had suffered during the recessions of the 1970s with industrial disputes, raising prices and the much written about winter of discontent.

The UK Government has sold numerous national assets some of which made sense, however, some have courted controversy and continue to create conversations about renationalisation of them back to public ownership.

Most controversial has been the water companies and the railway industry, with recent issues around water utility companies dumping increasing amounts of sewage into rivers and the sea due to not investing in infrastructure and paying out billions in dividends to shareholders. Some commentators are requesting that the government should renationalise the utilities, however, this would be very expensive.

Nationalisation is a buyout by the government, the only way the government could afford to do this would be to increase national debt even further resulting in more inflation and the potential to crash the economy.  Add to this the fact that billions are needed to be invested into the water companies to resolve the issue causing sewage dumping, which would still need to be covered by even more national debt the country is incapable of buying back companies.

We have seen that nationalised businesses are usually politicised, underfunded and run into the ground.  privatisation means that companies are run as a business, for the benefit of the shareholders and not the national good.  So when a company is a utility neither solution really works.

Another way forward

At Mobius, we believe that there is another way.  taking the businesses into Employee Ownership via our model of Employee Owned Trust, we can run the business for the community good.  Much like a community interest company, the EOT has the benefit of being commercial focused whilst sharing the profits with the staff.

The initial benefit would be better staff engagement within the business, providing better services and receiving fair compensation for their work.  Profits from the company can also be used to improve the utilities in question and to raise funds ready to acquire more utilities.

As the acquisition of the utilities would be expensive we have a plan.

First, as each railway contract ends, we bid to run the services with the staff, we set up individual EOT companies for each railway company that exists at the moment and slowly take over the railway industry with localised services.  Each is managed by the staff for the local economy, meaning more trains where needed, investment into rolling stock and an economic model to keep investing into the business.

We would then pool some of the profits of each of these businesses to acquire the water companies, running the utilities in the same way with improved compensation for staff, and reinvesting profits to secure water for the nation.

Follow Us