Severn Trent proposes ‘social purpose’ water companies
Liv Garfield, the chief executive of Severn Trent, is looking for support from utility firms to be reformed as “social purpose” companies as it looks to avoid the threat of nationalisation.
In an email obtained by the Evening Standard, Garfield wrote to utility CEO’s inviting them to an “off-the-record roundtable” chaired by Will Hutton, an Observer columnist who has written books including The State We’re In – an analysis into how the state can be updated.
Garfield looks to be attempting to appease Labour and save Severn Trent from the same fate as Thames Water, as she proposes social tariffs for vulnerable customers and a focus on contributing to the environment, whilst remaining highly profitable.
Plans to take control of Thames Water are already being discussed by the government, after its CEO Sarah Bentley resigned last Tuesday.
In a confidential email, obtained and published by the Evening Standard, Garfield wrote: “While it is clear Labour will not include nationalisation in its next manifesto, they are also not keen on entering into the election race championing the status quo. The leadership thinks there is room for improvement and, politically, there is significant pressure to ‘do something’ about utilities.
“One idea we believe might be attractive to the Labour leadership is repurposing utilities and utility networks into a new breed of declared social purpose companies – companies that remain privately owned, who absolutely can (and should) make a profit, but ones that also have a special duty to take a long-term view.”
Garfield also said that the Labour party was “aware we are soft testing various ideas but have asked us to keep it highly confidential so please don’t forward this email.”
According to The Guardian, Pirc has recommended that investors vote against Severn Trent’s pay report at its investor meeting next week.
The firm which advises shareholders says they should refuse plans to pay Garfield £3.2m as she is paid 28 times the average employee.
In addition, it recommends against Deloitte’s reappointment as auditor and re-election of John Coghlan, the audit committee chair, citing their lengthy tenures.