New Commission May Ban English Water Companies From Making a Profit 93
Water companies in England could be banned from making a profit under plans for a complete overhaul of the system. The Guardian: The idea is one of the options being considered by a new commission set up by the Department for Environment, Food and Rural Affairs (Defra) amid public fury over the way firms have prioritised profit over the environment. Sources at the department said they would consider forcing the sale of water companies in England to firms that would run them as not-for-profits. Unlike under nationalisation, the company would not be run by the government but by a private company, run for public benefit. The nonprofit model, which is widely used in other European countries, allows staff to be paid substantial salaries and bonuses but any profits on top of that are returned to the company.
Gonna be expensive (Score:2)
The spot for Water Works in Monopoly [fandom.com] would become useless. There'll be no point in buying it.
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You dweeb! Everybody knows Monopoly [wikipedia.org] was born in the U.S.
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You dweeb! Everybody knows Monopoly [wikipedia.org] was born in the U.S.
It's everywhere. https://boardgamegeek.com/boar... [boardgamegeek.com]
OK, with one addition (Score:2)
Water companies cannot make a profit and equally in force, the government cannot overspend its budget in any one year and budget growth cannot exceed number of native born citizens * inflation.
And the ration of government workers per-native born citizen cannot increase more than 0.01 percent every ten years.
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the free market solves everything! (Score:2)
Re: the free market solves everything! (Score:5, Interesting)
Theyâ(TM)re monopolies, so itâ(TM)s hardly a free market. I canâ(TM)t just to get my fresh water from (or send my waste to) a different company. Not only that, theyâ(TM)re abusive monopolists and a perfect example of why these are bad. My Thames Water bill has gone up nearly 40% in the last five years and they want to put it up by over 50% **after inflation** in the next five. Meanwhile, theyâ(TM)ve extracted billions of pounds in dividends while running up billions in debt and without improving service (including fixing leaks to reduce their 25% loss rate or reduce their dumping of raw sewage).
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Theyâ(TM)re monopolies, so itâ(TM)s hardly a free market.
You're confusing your terms - which is understandable since your view seems to be that of anyone who hasn't actually studied economics. Monopolies are a sign of a "free market" - literally a monopoly is only truly stable condition of a free market and it is the end goal of the free market. Many people use the term free market to mean competition, it's not. Competition is the unstable side effect of a free market that hasn't developed properly yet.
What you want to talk about is a "perfect market", they aren'
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There is no market with these water companies. Government/public assets were assigned to 10 areas and sold off. No companies competed to gain that market share. No new companies can attempt to enter the market. It's a system that's ripe for abuse, and that's what's happened.
The UK is like a good model for a bad idea (Score:4, Informative)
The UK is like a good model for a bad idea for the effects of privatization on what are at their essence public services. Water and Rail in the UK have seen marked downgrades in service and affordability since privatization.
Maybe you could also lump in the Russian Oligarchs, too. Indiana Toll Road...
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Rail was nationalized after they outsourced all engineering and didn't know any more how the signals worked.
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and stuck in the past. Odd how the state owned neighbor was able to get rid of the gates and has full speed tolling all over the place.
also that neighbor got rid of the gates in the ETC like over 15+ years ago.
Re: The UK is like a good model for a bad idea (Score:4, Insightful)
Or the owner loaded it down with debt and diverted the money. A previous owner leveraged the purchase, then transferred the debt to the company and 2 Billion to themselves. I'm going to go on a limb and say the new scammer did something similar.
What is the regulator supposed to do? Reward them for the scam by letting them shoot the fees into the stratosphere?
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https://www.bbc.com/news/busin... [bbc.com]
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Almost all that investment was paid for by debt for the company, between dividends and the sale price they didn't lose anything.
The suckers who bought it got fucked, but they were probably planning to do the exact same thing before interest rates pulled the plug on their exit scam.
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Sadly what they did was not illegal at the time, so it's very difficult to do anything about it now. It might be possible to nationalize them and pass all the losses to the investors, but some of those investments were in good faith.
Making them non-profit seems like it might be the best solution, given the situation. But it's still going to unfairly pass a lot of cost onto the consumer.
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Non profit companies are an improvement? (Score:5, Interesting)
Non profits are run for the benefit of the board and directors, for the benefit of the public my ass.
If it's some public scum sucking investment company you can at least buy shares in the scum sucker ... a non profit doesn't even give you a reach around.
Re:Non profit companies are an improvement? (Score:5, Insightful)
Non profits are run for the benefit of the board and directors, for the benefit of the public my ass.
If it's some public scum sucking investment company you can at least buy shares in the scum sucker ... a non profit doesn't even give you a reach around.
They even spell out the problem in the summary:
The nonprofit model, which is widely used in other European countries, allows staff to be paid substantial salaries and bonuses but any profits on top of that are returned to the company.
To me? This says flat out that if the company happens to be heading toward a profit, it will be handed out in executive bonuses. Every time. Which means it will focus on profit *JUST* as much as a fully "profit first" company, it'll just be much more personally incentivized for the executives. Brilliant plan to funnel that wealth *RIGHT* to the top with no intermediary steps.
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It's not that dark.
1) They don't have stock options (which is most of how private company executives plunder the public).
2) "Substantial" salaries are going to be well under typical CEO and executive branch compensation (on the order of $240,000 vs 2.4 million dollars)
3) The lower salaries *can* attract people who actually want to serve the public
Compare public vs private sector salaries.
You *do* want competent people running the organizations so you can't go too low or they will be incompetent or heinousl
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In the US, I'd say many of the non-profit hospital systems are examples of this. The people at the top are well compensated. Here is an article that I found interesting with links to others. https://www.houstonchronicle.c... [houstonchronicle.com]
Hospitals in the US are built like old world cathedrals now, monuments to the ego of the board. Wouldn't it be something if that money went into patient care instead? Gee, I wonder why our costs go up astronomically year over year?
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Maybe in big cities. Most small city non-profit hospitals are pretty sparse. Doesn't keep the CEO from somehow still making millions of dollars per year on a non-profit business that is always in the red because it must provide regardless of ability to pay, so it's services are monopolized by those same people.
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To me? This says flat out that if the company happens to be heading toward a profit, it will be handed out in executive bonuses. Every time. Which means it will focus on profit *JUST* as much as a fully "profit first" company, it'll just be much more personally incentivized for the executives. Brilliant plan to funnel that wealth *RIGHT* to the top with no intermediary steps.
Non-profit compensation is regulated heavily. Yes some of what you say happens, but it is far more limited than in a capital model. There's a reason the Forbes100 list has only people with for-profit companies in it.
But you don't need to guess, right there in your quoted text is the answer "widely used in other European countries" - and most countries, even some eastern European ones don't have the disgraceful performance that the UK water companies are producing right now.
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They could combine it with a cap on salaries and bonuses legally tied to performance, such as not dumping raw sewage into rivers.
They could also add legal liability for dumping raw sewage, which would make the job much less attractive to the sorts of capitalists we want to avoid, and attract people who intend to do the best job they can with it (since anything less could land them in prison).
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A non-profit is like a for-profit company, except they're okay with a net profit of £0. They have almost all of the same concerns. They'll still squeeze people for cash. A government agency can tap into general funds or deficit spending if revenues are too low for the level of service they are obligated to provide.
Re:Non profit companies are an improvement? (Score:5, Informative)
Re:Non profit companies are an improvement? (Score:4, Interesting)
In the US, I did work for a dental nonprofit. They couldn't have above a certain amount at the end of the fiscal year, so they bought land. Land! LAND!!!
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A non-profit is like a for-profit company, except they're okay with a net profit of £0. They have almost all of the same concerns. They'll still squeeze people for cash. A government agency can tap into general funds or deficit spending if revenues are too low for the level of service they are obligated to provide.
Yeah, there's a pretty common misconception that nonprofits are fundamentally more altruistic than a for profit company, and that's just not always the case. Ideally they have a mission statement and perform actions in service of that statement, but it's not at all uncommon for people to become very wealthy running nonprofits, or to have them accumulate wealth in excess of expenses "for a rainy day" or expansion. It's pretty easy to justify legally, and highly discretionary.
A government owned enterprise isn
Maybe as a mutual? (Score:2)
Perhaps they could structure it as a mutual corporation: run for the benefit of the customers, not publicly traded.
In the US, State Farm is probably the largest example of a mutual.
Profits are returned to the customer as more favorable rates, or rebates.
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The board of State Farm can rewrite the bylaws and take over complete control, limited only by fiduciary duty. What keeps them on the straight and narrow is market discipline.
For a natural monopoly that force is absent, there is only the regulator. Who just gets bullied or corrupted into letting them raise fees as they find ways to divert the money, "we really needed to take a loan to pay dividends, now let us tax the peons and maybe there's a little something something plausible deniable in it for you in t
I live in the UK (Score:5, Informative)
I live in Manchester, UK - I've lived in NYC and Athens previously, both cities with less water (especially the latter), and yet I pay rather exorbitant prices here for water (over $50/month for 2 people at the current home) in comparison. The idea of the Conservative government at the time (I think it was Thatcher's era?) was that if you take a public utility that is a natural monopoly and gift it to for-profit companies they would, somehow, with the magic of capitalism, invest more in infrastructure than the ol' government run utility company. What happened, to everyone's surprise is that they stopped investing to maximize profits and when it rains (which is like half the days a year this being England) they no longer have the capacity to process the sewage so they just spill it into the sea untreated. They get fined for this, but the fines are lower than the cost of investing into infrastructure. It's a disgrace...
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Untreated sewage? No, shit is included I think.
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I can assure you that there manifestly is shit. In the sea for one.
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The water companies are billions of pounds in debt and unable to discharge it through bankruptcy as they are deemed necessary.
And you feel that this will result in something positive for the citizens?
What I see is that the population will pay dear for the "taxes (fines)", cost cutting in maintenance and price controls. The whole point of taxes is to provide a service for the benefit of the taxpayers.
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I live in Manchester, UK - I've lived in NYC and Athens previously, both cities with less water (especially the latter), and yet I pay rather exorbitant prices here for water (over $50/month for 2 people at the current home) in comparison.
1. Compared to California or Florida, that's not exorbitant.
2. You are mostly paying for sewage treatment -- that's where the bulk of the water company's costs are. Unfortunately, what you are really paying for is the shareholders' dividends.
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As for treatment, an excuse for hiking up bills was to allegedly pay for the chemicals used which had gone up in price due to Brexit. Except this was bullshit as the suppliers were mainly UK based and their prices hadn't increased by any noticeable margin.
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It's worse than that. Part of the deal of privatisation was that there would be investment in infrastructure before dividends would be even considered being paid out. But when they decided to not bother, no one in Government took them to task for this breach of contract, allowing one company in particularly to be acquired by Macquarie who lumped completely unrelated debt of billions onto it then walked off with a nice profit a few years later thanks to fuck you accounting. And still no one in Government did
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It's worse than *that*, even. The Tories didn't *want* the water companies to invest in infra: they wanted low prices and they definitely didn't want new reservoirs built, because they cared only about sour old arseholes, their voter base, who want nothing new built anywhere ever. The Tories have shat on everything so, so badly. It's going to take decades to fix. It's unforgivable
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Reminds me of Franks speech in the opening titles to Shameless "Well for fuck’s sake – we live in Manchester ! And they charge us for water."
If "they" could find a way to put a meter on oxygen they'd try charging us for that too.
Wrong link (Score:5, Informative)
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Oh, and just when I thought the crayon-eater may have given up, they show back up with more incorrect fascism and communism talk.
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Blah blah blah
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I've lived in a number of places, with some private, government, and cooperative utilities.
Personally, I have found that the cooperatives to have the best mix of service and price. For profits have been the worst.
At some point, you need so many controls to keep a for profit company from shitting the bed, it is better to go to a different model.
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Nope, all you need is competition...
Humanity has had three independent experiments. Peoples of identical cultural and religious backgrounds, speaking the same language, lived for some decades in parallel under different models:
The dastardly KKKapitalism delivered far higher quality goods and services (as w
Natural monopolies (Score:2)
I'm all for competition where you can have effective competition - many different companies can manufacture and deliver all sorts of physical products. But delivering basic utility stuff is harder. Water, electricity, sewer, etc...
Competition for things like water supply is hard. Utilities tend to be natural monopolies. Electricity is being broken a bit with solar panels and cheaper batteries, but once you're over a certain density you still need to transport it in somehow. Starlink can help break local
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It is not — that's a myth [mises.org] spread by government officials, who want job-security, importance and patronage.
For decades this lie's been repeated about telephone and cable-TV services too — and then, in the 90-ies, it turned out, competition is perfectly possible. Today the same poles carry FiOS (optic) cables to me, and Cablevision (coax) to my neighbors, while Google Fiber is spreading too.
Tokyo has competing subway li
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why can't Western cities?
Because capitalism. First, you need the capital to start said business. If you don't have it, you'll need to convince someone (bank, private investor, etc) to lend it to you and that you'll pay them back. Then you need to either be successful in the business or, at the very least, successful at convincing someone to give you more and more money. Meanwhile, the already established business will do anything and everything in its power to ensure you make as little money as possible so that you can't pay back y
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Nobody asked Commie...
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You literally did.
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I think you missed something. Did I advocate for government ownership of the utilities? Or did I advocate for utilities to be owned by the customers? That's what a "cooperative" means, after all.
That doesn't mean forcing a monopoly, like what your article mentions.
It's just extremely unlikely for a commercial provider to be able to successfully compete against a cooperative utility that doesn't need to show a profit, just provide the service to its owners at a break-even price.
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That's demonstrably false! There is nothing in American system, for example, that blocks or prohibits such cooperative entities. Indeed, they do spring up from time to time [dailycoffeenews.com], but, If this truly were a winning approach, there would've been plenty of such enterprises all over. And yet, none have risen to any sort of prominence — unless the particular form of ownership is mandated by gove
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That's demonstrably false!
Wrong again. There is nothing in federal law that bans them. But there are several states and smaller local governments that do block and/or prohibit them. Because the private sector spends lots of money lobbying the government to ban coops, and even small government owned utilities, or make other legal difficulties for such entities to exist who don't have the money for such battles. Comcast, for example, has spent millions of dollars trying to prevent various cities from having their own fiber networks.
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No one is talking to you. You've already admitted [slashdot.org] to want all means of production to belong to "people" — which makes you a Communis — an adherent of the single most murderous school of thought known to humanity.
Fuck off, eat shit and die — or, at least, stop trying to insert yourself into every conversation.
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No. I want to actually belong to the people not to the "people". Big difference retard.
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want it*
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More bullshittery. This crayon eater still has no idea what he is talking about.
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Nope, all you need is competition...
Ah the old communism excuse! If Capitalism isn't working it's because people are doing it wrong!
Cherry pick all you want, but Scotland and Wales which are geographically, socially and politically very similar to England have respectively government owned and non profit services which are measurably better across the board.
We don't need your commnuistic platitudes about how you ust have to do extreme communism/capitalism right for everything to be sunshine and rainbows. We
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If Capitalism isn't working, it's because people are doing Communism. Or Fascism — the two are so close, they hate each other [wikipedia.org]...
Fixed that for you.
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If Capitalism isn't working, it's because people are doing Communism.
Wrong again, crayon eater. Capitalism is working as intended, which is to say it's working poorly. Capitalism is great for jump starting an economy and boosting its GDP. It's naturally terrible at pretty much everything else, doesn't matter what type of government you pair with it.
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If Capitalism isn't working, it's because people are doing Communism.
You're just a commie at heart, mi, because you're arguing from the same point of view.
Your ideology does not allow you to accept flaws in communism so like all good commies, you declare that everyone muse be communisming wrong and needs to do it even harder because no one's quite got it to work yet.
s/communism/capitalism/g makes no difference.
My bill used to be (Score:2)
£2 per year or something. And noone would be bothered if you didn't pay. Of course it was so laughably tiny very few people didn't.
Nowdays, it trumps even the gas bill.
What??? For-profit water and sewer? (Score:2)
Some years ago, Ontario proposed to change the law to allow that, and to put the services up for bid. I bid an unlimited amount of money for the Chatham water and sewerage service and noted that I would charge the residents commensurately.
Oddly enough, the law never passed.
Natural monopolies should be publicly owned (Score:5, Insightful)
Shortage of water (Score:2)
Shortage of water is coming in 123
Kafkaesque bureaucracy will arrive at the same time the water runs out.
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We already have shortages of water in the UK. We already have terrible service. We used to have no water shortages and good service and low prices -- before privatisation. But we can't just unwind privatisation, because the Tories did it with poison pills meaning it will cost a fortune. Fuckers.
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Shortage of water is coming in 123
Are you a moron from the UK who is utterly impervious to the world outside your front door or a moron from another country with an axe to grind and a limitless supply of stupid to grind it with?
We ALREADY have water shortages. In England. Because of private companies.
Law of unintended consequences (Score:2)
If a water company can't make a profit then what incentive is there to give a fuck? Good service? Nope. Fixing leaks? Nope. Cryptosporidium? We don't care.
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Wrong. UK water companies are a for-profit model but still have a remit to do all the things I mentioned - fix leaks, provide clean water, provide service in a measurable and timely fashion. If the incentive of profit is removed, then so is the reward for compliance. They will do the bare minimum while seeking an exit. OR they will restructure their business to ringfence the profitable bits, do a bit of Hollywood accounting to pretend they're making no money and keep the core function on life support.
If the
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This is so naive. Market incentives depend on competition. Not only is there no competition in water services in the UK, it's not even a contested market, ie it's not like rail where there's a periodic review of franchises. So there is *already* no market-based incentive for good service, fixing leaks and avoiding water-borne illnesses, and we already have huge problems with all of those despite water companies making profits. The only incentives left are regulatory, and Ofwat is fucking spineless and has b
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Yes because all Slashdot readers are from the US shilly. You tit. And there are other forms of incentive to water provider, as you should know. But if profit isn't one of them, these companies literally have no incentive to operate.
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If you’re actually British and made that original comment, you’re even more of a pillock than I originally thought.
And do tell, what are the incentives for a water provider to deliver high quality services beyond profit and regulatory?
"Huge salary for me!" is non-profit too. (Score:2)
More change for change's sake. "See! I changed it."
Odd! (Score:2)
Re: Odd! (Score:1)
More crap on Slashdot (Score:2, Interesting)
Can someone explain how anything in this article is relevant to Slashdot? There is no technology angle at all to it.
All we have is the usual posting of articles from the Guardian
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"News for nerds, stuff that matters"
Nothing to do with technology.
That said, even as a Brit, I don't understand what's interesting about it, especially as nothing has happened yet.
However, if we're going to apply the same level to everything, I'd seen thousands of US-centric posts that have nothing to do with anything and you have to understand a whole bunch of irrelevant US policy, companies, celebrities, etc. to even understand them.
Context: (Score:2)
Context:
UK water supply was privatised by Margaret Thatcher (80's).
When they did so, they carved the country up, and gave ONE company exclusive rights over each are of the country.
That company is a private company, which literally has a monopoly in its given area. You cannot change your water company. If you like in that area, that is ALWAYS going to be your water company.
Water companies have been heavily "invested in" by shareholders... because of the monopoly. They extract large profits and yet do no "
US has this in the Southeast... (Score:2)