Place-based stewardship in other sectors
Learning from innovative ways of partnership working, governance structures and alternative models of ownership
Words by CLES | published in EWSC Research & Insight
Key Takeaways:
This article explores how water utility companies can learn from innovative ways of partnership working, governance structures and alternative models of ownership, as core elements of place-based stewardship, to deliver positive social, environmental and economic outcomes for people, planet and place. Here, the main learnings:
- By working in partnership to develop policies and strategies with local people and other local anchor institutions water utilities could further support the economic, social and environmental wellbeing of place, thereby creating more value for people, planet and place.
- Governance structures which include a plurality of local stakeholders can ensure water utilities act as more effective stewards and could enable local community and anchor representatives, as non-executive directors, to shape and influence water utilities’ operations.
- Developing an alternative mode of ownership, such as Public-Commons Partnerships, for water utility firms ensures that local stakeholders, particularly those who have an interest in the organisations place based stewardship, can support the delivery of strategic national and global ambitions and gives people and place a real stake in the running of water utilities.
1. Innovative Stewardship from Other Sectors
In this article we explore examples of innovative stewardship from a wide range of other sectors, from housing to health to energy, drawing on case studies from the UK and internationally, highlighting examples of innovative partnerships, governance and ownership models as core elements of effective stewardship, while also drawing out the extent of transferability to the water sector in England and Wales. Partnerships, governance, and ownership, as defined and explored below, are core to the question of stewardship because they are effective methods of placing a plurality of stakeholders from the places that water companies operate at the core of decision making. These case studies were selected due to a focus on one or several priorities from the following three positive outcomes that go beyond their statutory or traditional sectoral and trading responsibilities: social, economic, and environmental.
By implementing innovative approaches to stewardship through partnership working with other place-based anchors, reforming governance and exploring alternative modes of ownership, water utilities in England and Wales can generate more value for local communities, particularly in relation to the specific challenges they currently face, and build resilience for the greater challenges of the future.
2. Partnerships
There are clear benefits for water utilities working in partnership with other public bodies (for instance as part of anchor networks), non-profit organisations, communities and citizens. Working collectively can lead to innovative solutions for tackling environmental breakdown, but also promote a series of wider environmental, social and economic co-benefits. Partnerships can fill gaps and add value to agendas where collective responses are necessary to address challenges.
Case study: Higher Education & Academia, Civic University Agreements
As place-based institutions, universities have a responsibility to the communities in which they exist. A Civic University Agreement, now published by 15 universities or groups of universities, are civic strategies based around four principles:
- Place — attaching a high priority to the social, economic, environmental and cultural needs of their place;
- Public — based on an analysis of local priorities and co-designed by communities;
- Partnerships — collaboration with other local anchor institutions to collectively overcome local challenges; and
- Measurement — clear goals to measure impact.
This has resulted in innovative projects which go beyond their traditional roles of academic research and toward more practice-based and solutions-focused action that targets the issues that communities are facing. The Growing Communities Through Nature project, a partnership between the University of Exeter and Cornwall Council’s Environment Service, explored the role of public green space in climate change mitigation. Through a series of workshops, the public co-designed a food growing garden and two open green spaces. These spaces were funded through a combination of council and academic research funding.
This work is then amplified across the country through the Civic Universities Network, a forum for universities to share best practices relating to civic engagement.
Learning for the Water Sector:
The Civic Universities Agreement and Civic University Network offers a useful model for partnership working from which the water industry in England and Wales could learn. Firstly, there are parallels between the context which the water industry and higher education sector are operating in. For various reasons, both were seen much more as local institutions in the 20th century, and more recently as organisations competing in global markets. The nature of our privatised utilities, means shareholder value is a priority, and may count the investment of time and resources in wider partnership working as a cost against profit returns. However, co-designing, developing and delivering initiatives which promote improved stewardship is necessary to support water utilities to deliver on their own commitments while acknowledging and addressing the interconnected challenges (as explored in ‘Challenges connecting the water and housing sector’).
Both are also operating in a political context of increasing devolution, such as city region deals. In addition, similar to universities, many water and wastewater companies in England and Wales recognise their responsibilities to place and local communities leading some good, place-based projects. However, there is also a lack of explicit and purposeful strategy of meaningful partnership development with other anchor institutions, such as local NHS Trusts, to develop anchor-based interventions (as explored in ‘Shaping local economies through anchor activity’) or communities to locate local economic priorities. As such, regulatory regimes should be mindful of supporting and enabling partnership-based ways of working.
By working in partnership to co-design strategies with local people and other local anchor institutions, based on local priorities, water utilities could bolster their approach to supporting the economic, social and environmental wellbeing of place, thereby creating more value for people and place. Finally, through a sector-wide network, water utilities could also share best practice and promote the commitment to improving places alongside local communities.
Further case studies of innovative partnership working include the Healthy New Towns and One Public Estate programmes, as well as the World Economic Forum’s Alliance for Clean Air. All of these partnerships look beyond their statutory or traditional boundaries to understand the interconnectedness of priorities such as the social determinants of health, utilising collective property and land assets to support major public service transformation or reducing emissions down value and supply chains.
2. Governance
Governance is the framework of authority and accountability that defines and controls the outputs, outcomes and benefits from activity (Association for Project Management, 2022). Governance frameworks can be used to give a voice to all relevant stakeholders and ensure an equitable distribution of outcomes.
Reforming the governance structures of water utilities can support stewardship through opening up avenues for local stakeholder to shape and influence operations. This can result in giving greater priority to innovative stewardship within business decision making as well as bringing knowledge, understanding and skills into the organisation. The introduction of Integrated Care Systems, as explored in the case study below, exemplifies this approach.
Case study: Integrated Care Systems
The Health & Care Act 2022 has established a new legislative framework which sees the NHS organised into 42 Integrated Care Systems (ICSs) which will align partners to improve outcomes, tackle inequalities, enhance productivity and make best use of resources and to strengthen local communities. They have been introduced to align action within the health system around a shared purpose: to improve outcomes and tackle inequalities, to enhance productivity and make best use of resources and to strengthen local communities (NHS, Integrated Care Systems: design framework. P.2, 2021).
ICS’s are to be strong place-based partnerships between the NHS, local councils, voluntary organisations and local residents, charged with designing and delivering integrated services within their localities, bringing together the many and varied services which support population health. ‘Integrated Care Systems: a design framework’ describes the core purpose of an ICS as being to:
- Improve outcomes in population health and healthcare;
- Tackle inequalities in outcomes, experience and access;
- Enhance productivity and value for money;
- Help the NHS support broader social and economic development.
This latest NHS reform seeks to build local stewardship responsibilities for health and care, enabling local places to respond to local challenges and innovate locally, less centrally controlled by co-ordinating bodies.
With the introduction of the Integrated Care Board (ICB), there will be a joint committee of both the ICS NHS body, each constituent local authority with public health responsibilities within the ICS footprint and Voluntary, Community & Social Enterprise (VCSE) sector organisations. This new governance structure sets out to align ambition, purpose and strategy across partners and will be responsible for creating the integrated care strategy for the ICS. It will have a unitary board made up of executives, partner members and independent non-executive directors. This brings a new diversity of perspectives, experience and networks to the table and gives the health system an opportunity to work in partnership in ways it traditionally has not, while recognising the interconnectedness of priorities beyond the healthcare sector itself — effectively enabling a growing recognition of the social determinants of health and new means to tackle public health issues.
While ICSs are relatively new, they are already producing outcomes that look beyond the traditional purview of the healthcare sector and toward maximising the economic prospects of their local community and thereby maximising their impact as a steward of their local place, as seen in the ‘I Can’ programme of targeted employment (the ‘I Can’ programme is further explored in ‘Amplifying impact through Anchor Networks’).
Learning for the Water Sector:
In the reorganisation of NHS governance, the separation of strategy setting and the inclusion of a wider set of stakeholders, including VCSE organisations involved in the delivery of health and care services is expected to enable more strategic conversations to take place which are focused on enabling improved stewardship.
In the reorganisation of NHS governance, the separation of strategy setting and the inclusion of a wider set of stakeholders, including VCSE organisations involved in the delivery of health and care services is expected to enable more strategic conversations to take place which are focused on enabling improved stewardship.
If water utilities can look to the value of non-executive directors from local anchor institutions such as NHS Trusts or Universities and Colleges, and/or community/voluntary sector organisations, such as local community energy organisations, who are concerned with the stewardship of the local environment. This could support an enhanced focus on partnership working for innovative stewardship, whether through maximising economic opportunity for the local place or through assisting local decarbonisation efforts — or both, as explored in the Saddleworth Community Hydro project case study in ‘Shaping local economies through anchor activity’.
Ofwat, for example, introduced revised board leadership, transparency and governance principles in 2019, with a framework of four overarching objectives which included a requirement to boost independent representation on the board. This requirement noted the need for independent non-executive directors to be the largest single group on the board. Engagement with parties and individuals who prioritise stewardship and the development of the local economy are likely to have a positive impact on the water utility’s operations and their social impact.
Further case studies of innovative governance include Community Land Trusts and Public Benefit Corporations/B Corp certification. These governance structures are known to deliver high standards of social, environmental performance, transparency and accountability.
3. Ownership
While ownership is a hotly contested area, with the pros and cons of returning water utilities to public ownership widely debated, there are several hybrid ownership models that could be learnt from, in a future where stewardship will require a greater role for other stakeholders and local communities. Local communities, employees, and the local state could potentially become co-owners of water utilities where it demonstrates improved stewardship of a common resource.
(CLES has written more on water utility ownership in S10.)
Case study: Public Common Partnerships
Public-Common Partnerships (PCPs) are a proposed approach to the common ownership and governance of assets and resources. Imagined as a reverse engineering of the Public-Private Partnerships that dominated the past 40 years, PCPs propose a role for public institutions in both de-risking and enabling processes of ‘commoning’.
Commoning is the practice of collaborating and sharing to meet everyday needs and achieve the well-being of individuals and communities. Commoning affirms people’s right to use the ‘commons’ to fulfil their basic needs. The return to the ideas of the ‘commons’ represents a new way for everyday citizens to make decisions and take action to shape the future of their communities, outside the profit-driven mechanics of the market (Milburn and Russell, 2019).
A PCP is typically a joint enterprise that incorporates ‘common associations’, public bodies, and wider stakeholders in the ownership and governance of assets, which could range from local energy systems to large-scale public housing to infrastructure such as water, transport, or food production and distribution. Proponents argue that these common goods should be collectively owned and co-governed by local residents in a commoner’s associations alongside co-combined governance with project specific relevant parties such as local authorities, trade unions and relevant experts.
Through creating different opportunities for democratic engagement, and through bringing profits under popular democratic control, PCPs are conceptualised as a vehicle for the expansive definancialisation and democratisation of the economy. They are a method for “taking back control” of the infrastructures and resources that underpin our collective well-being — from food markets to water basins — while increasing our collective ability to fight for the wider structural changes in our society and economy that are so urgently needed. A PCP represents a new model for developing collaboration, jointly-owned, jointly-financed and jointly-governed by its partners, sharing any surpluses created but with an overarching priority of creating community benefit.
How a PCP with a Local Authority would be structured:
Example:
The small German town of Wolfhagen (14,000 inhabitants) pioneered the re-municipalisation of its energy grid in 2005 and demonstrated how the city could work with citizens through co-ownership of the newly established, municipally owned energy company, Stadtwerke Wolfhagen, and example of a PCP in operation within the energy sector. By 2014, Wolfhagen became 100% powered by its own renewable energy sources, reaching 105% by 2022 to become a net exporter with profits being channelled into community services like childcare. More than 280 other cities and towns throughout Germany have taken inspiration from Wolfhagen and reclaimed their electricity grids.
Stadtwerke Wolfhagen supported the creation of a citizen cooperative known as Bürgerenergiegenossenschaft (BEG) Wolfhagen, which owns 25 per cent of its capital and contributes to the strategic decisions. BEG Wolfhagen has over 800 members, and direct influence over the operations and direction of Stadtwerke Wolfhagen. Currently, of the nine seats on the board of Stadtwerke Wolfhagen two are occupied by the cooperative.
The profits from BEG Wolfhagen’s share of operations are fed into an energy-saving fund that enables citizen-led initiatives to improve energy efficiency with plans to create a smart network across the town alerting households when energy stores are low/high and prices are high/low.
Additional examples of PCPs elsewhere can be found here.
Learning for the Water Sector:
Developing an alternative model of ownership of a water utility firm to ensure the local stakeholders who have an interest in the organisations place based stewardship have control, rather than private shareholders outside of the firm and community, can support the delivery of strategic national and global ambitions — the transition to a low carbon economy.
While England’s water utilities may be difficult to fully renationalise, carving out an ownership stake is clearly among the available methods for gaining influence and shaping priorities. While Ofwat has announced that it will modify water company licences to prevent the payment of dividends if they would risk the company’s ‘financial resilience’, it is unclear how this change will attract the investment to address infrastructural deficiencies. Within this context, public ownership and new hybrid and democratic ownership models, such as PCPs, can be explored as a more effective tool to help us address this challenge than is currently offered through regulatory frameworks.
Additional case studies of innovative approaches to ownership include Channel 4, fan ownership in German football clubs, and France’s EDF Energy.
By implementing innovative approaches to stewardship through partnership working with other place-based anchors, reforming governance and exploring alternative modes of ownership, water utilities in England and Wales can generate more value for local communities, particularly in relation to the specific challenges they currently face, and build resilience for the greater challenges of the future.
The lessons discussed within this paper reveal a patchwork of examples of innovative partnerships, governance models and alternative models of ownership from other sectors which strive towards place-based stewardship by maximising the economic prospects of local people, or actively assisting local decarbonisation efforts. These examples provide the blueprints necessary to reimagine the roles of water utility companies, the decisions they make and who influences the operational decision making. Water companies can join those organisations explored above who lead by example by trialling and implementing these changes and models, to serve people planet and place through transforming their ways of working and organisational structures.
This article is written by CLES (The Centre for Local Economic Strategies), the national organisation for local economies. CLES contributed research on the theme of stewardship and the role of water companies as anchor institutions. This article is one of four produced by CLES: Water companies as place-based anchors; Shaping local economies through anchor activity; and Amplifying impact through Anchor Networks.
As Discovery research lead and series editor, Arup’s Transformation & Design Studio led the multi-partner research effort contributing public innovation and strategic design expertise.
This is one of a series of insight articles produced as part of the EWSC innovation programme, exploring how integrated water management can be delivered through innovative housing and stewardship models. For an overview of the project, latest news or to get in touch visit https://www.ewsc.org.uk/.
