Glas Half Full

River Lugg, Herefordshire. Copyright Philippa Roberts

Glas Cymru, the not-for-profit parent company of Welsh Water has announced a massive spending programme for the next three years, which it says will create 1,500 jobs.  Chris Jones from the company says it is able to do this in part because of its not-for-profit model in an article in this week's Guardian.


Welsh Water's press release says that not only is this £100 million more than they originally planned to spend, but that 50% of it will be spent with local companies.  This is exactly the sort of investment I've talked about in a previous blog here, that I think we need to get the economy going.  It's productive investment, rather than speculative investment and it's interesting that Glas Cymru think this is possible because of their unusual ownership structure.  They are the only water company that is a not-for-profit and not state owned.


Obviously at this point I should declare an interest and say that not only do I live in Herefordshire and so am a Welsh Water customer, but I am also a member of Glas Cymru.  I feel proud to be part of such an innovative company and the reason why I became a member was because of this ownership structure.  (All of which doesn't mean that I think privatisation of the water companies was a good idea in the first place.)


Personal involvement aside, I think you'll agree that this is refreshingly good news when so much else is bad at the moment.  Only time will tell if it's going to be money well spent, but I think it's exactly what we need to do right now.

Podcast: Changing the Way We Think About Cars- Forever

Copyright Philippa Roberts 2012 Riversimple's car will be a whole lot more efficient than this

A discussion with Hugo Spowers from Riversimple about the hydrogen fuel-cell powered car of the future.  But you can't buy it!


Start: Who, or what are Riversimple?
5min: What is a hydrogen fuel cell and how does a hydrogen fuel cell car work?
9min: Mass decompounding explained
10min: The car company that doesn't sell cars
12min: Car materials - carbon fibre versus steel
15min: Business risks
17 min: End of life vehicles (ELV) - disassembly and recycling cars
19min: Open source design
23min: Company structure and innovative governance

Underemployed?

ONS May 2012

I keep hearing commentators on the radio talking about our 'weak growth' and am getting fed up shouting back at them.  For it was only last month that the ONS figures showed the current recession is slightly worse that we thought, with GDP shrinking by 0.3%.  That's shrinking, not weakly growing, a distinction that seems to be lost on too many broadcasters at the moment.




So while we wait for the Government's Plan A.5 (it can't be B because that would imply that Plan A wouldn't have worked), involving some investment apparently (which is what they said all along but we might have missed that bit), I thought a quick look at employment data would be interesting.




Again, thanks to the ONS, especially their youtube channel.  I thought that there would be a limited market for this, but it does have over 500 subscribers so I am clearly wrong and I can happily recommend it.




The unemployment rate is currently 8.2% and has fallen slightly recently, with employment increasing by 105k based on figures in May 2012.  However there was a 13k reduction in full time jobs and the entire rise in employment resulted from an increase in part-time jobs.


Now we are lucky in the UK to have a minimum wage, so those in work 'should' be able to keep above the poverty line.  In the fact the number of people at risk of poverty and in poverty, when defined as having less than 60% of median national household disposal income, has fallen since the recession started in 2008.  However this is because of the dramatic fall in the median household income, not because of any improvement in the circumstances of those who have less than £9000 income a year in their households. 


Poverty levels aside, the percentage of people in part-time work who want full-time work is increasing, suggesting that people are taking whatever job they can find, regardless of hours.  In fact, one of the unusual characteristics of this recession has been the fact that unemployment hasn't skyrocketed in the way it has in past recessions.  Tied to this, there hasn't been the large increases in home repossessions we saw in the recessions of the early 1990s.  If we are 'all in it together' at all, it appears that people are working better with their employers and, much as I hate to say this, banks with their customers, to find more flexible ways to cope.


But coping may be all that some families are doing.  Going back to the poverty figures briefly, the two age groups most at risk are those aged 18-24 and the over 65s.  This can be seen in the table at the top of this blog.  Across most of Europe, women are far more at risk than men, perhaps linked to the fact that they are far more likely to be in part-time work.


The ability to work and earn enough money to support yourself is really a basic human need.  Early in the recession I heard a commentator on the radio talking about structural unemployment in the USA; they said that it was too low and should be a higher figure.  I found this shocking at the time, to think that you could increase the percent of 'structurally unemployed' and with a couple of strokes on a keyboard wipe out the hope of any decent future for hundreds of thousands of people.  


It's important to remember that behind every employment statistic is a person; and that every part-time job may be a person moving closer to poverty.  

Futuristic car, futuristic company

Had a great morning interviewing one of the founders of Riversimple.  It's the most inspirational company and one that caught my interest a few years ago because of its open source car design.

The company itself aspires to change personal transport, and so has created a hydrogen fuel cell car; no battery, no combustion engine.  Amazing what you can do when you start with a blank page and a problem - i.e. how to make transport sustainable.  When you compare this with the normal approach of  tweaking what you already have, you can understand why both their proposition and their business model is so exciting and, I think, demonstrates so well what I am talking about when I speak about collaborative capitalism.

More to follow.  I'll edit the podcast this week so you can hear all about it for yourselves!

Austerity versus Investment - the double dip answer

ONS GDP and the Labour Market - 2012 Q1 - April GDP update

Last week the ONS released the official statistics that show we are once again in recession.  As the table I've copied here, and the explanation summary that goes with this table state:

"..total output has declined by 0.5 % over the last two quarters.  The economy has not expanded at all over the last year.  Since 2010 Q3, when the economy had grown for five consecutive quarters following the 2008-09 recession, real GDP has contracted by a total of 0.2%."

Now as a Keynesian, I unashamedly will see this as an example of how the austerity package isn't working, especially when compared to the current performance of say, the USA.  However I believe it also demonstrates the importance of one of the key characteristics of collaborative capitalism - long-term sustainable investment.


When I talk about sustainable investment, I am of course talking about triple bottom line investment, but with the environment as perhaps the most important of the three factors.  The last Government invested heavily in our social infrastructure - in rebuilding schools and hospitals in particular.  What I believe is now needed is an investment in our environmental infrastructure, if we are to be truly competitive and have an economy that has a chance of being successful over the next few decades.


At the CIWM Midlands AGM last week, Martin Brocklehurst gave a great presentation about the importance of resource security and how that is currently driving the EU environmental agenda.  It is an argument I have mentioned before; one being made by the Green Alliance and the Ellen MacArthur Foundation in this country.  But it is one that our policy makers talk less about.  If we want to 'rebalance' the economy then we need to make sure that our manufacturers have a secure and price-stable source of the resources they need.  And the thing we know about most of these resources, if they are raw materials? That despite the dismissal of the limits to growth arguments, they will run out (in an economic, if not a real sense).  


Right now, China produces over 90% of the world's heavy rare earth metals which are used in mobile phones, computer screens and hybrid car technologies.  Until quite recently US demand was met by its domestic supply, now that demand is met by China.  This oft-cited example is a snapshot of potential future resource security issues, but there are many more examples on our doorstep.  In the waste and resources sector we collect valuable materials for recycling, and then send them abroad for processing, while domestic companies struggle to find the same clean materials as feedstocks for their processes.


Environmental investment would be investment in these areas.  We must support the infrastructure that will allow us to keep these valuable resources and materials in the UK, beingprocessed here and made available for manufacturing.  This is how we will support business and job growth in the future.


It's not just waste and resources infrastructure that needs the investment.  In environmental investment I also include energy, water and transport.  We have benefitted hugely from the Victorian legacy of infrastructure built to last and benefit future generations, not just this week's shareholders.  This is the type of investment that should be at the heart of Government policy right now.  It's a key part of Collaborative Capitalism and a should be top of George Osbourne's to-do list.

£250m Weekly Waste Fund Workshops

Busy travelling the country at the moment, facilitating some workshops on behalf of the LGA.  We've been to London and Manchester and have the following dates booked in:


Tuesday 17 April - Birmingham
Wednesday 18 April - Newcastle
Thursday 19 April - London.


The aim of the workshops is to give local authorities guidance and support for the Weekly Waste Fund application, and a clearer idea about the fund and how assessments can be made.  Supporting partners include Local Partnerships, WRAP, iESE and of course, DCLG and the LGA.


Responses so far have been positive and I think the sessions have been really constructive.  If you want to find out more, or are looking for support with your application, please do get in touch.

'Competition' in the Water Industry

This is a procrastination blog.  Because I should be doing something else right now that is more important, but I have had a couple of conversations this week about competition and then saw an LSE blog about competition in the water industry.

The LSE blog gave the recent Water White paper an amber light for competition because it says that retail competition for businesses is currently limited based on how much water you use, so the potential market is only 2,200 customers.  What it doesn't mention is that Ofwat, in its review of Competition in the Water and Sewerage Industries: Part II, states:

"- the WSL regime, which allows about 2,200 customers who are likely to use at least 50ML of water a year to switch supplier.


These forms of competition are useful, but very limited.  The WSL regime is the principle framework for allowing customers to choose their water supplier.  It was introduced in December 2005, but to date has not been successful in enabling any customer to switch their supplier."

Now, it could be that the WSL regime is ineffective or cumbersome and that is why competition has not resulted in any customers changing supplier.  Or it could be that water is water wherever you buy it, and that competition has limited appeal.

The more I talk to people in the industry, the more I feel that something huge and strategic, like the physical infrastructure of the water network, should be owned by the state.  Perhaps like Network Rail, or the National Grid.  Competition will mean asking companies to compete when they are all selling an identical product, but with very different infrastructure costs.  As the Government subsidy to South West Water has shown, it costs more if you have hundreds of miles of coastline and bathing water to clean-up and protect, than if you are landlocked, like Severn Trent and Thames.  So you have different infrastructure costs, which have to be maintained in a highly regulated industry, but you are going to be competing - on price and service levels?

Considering the furore over recent months about the lack of transparency in the consumer electricity markets, I find the Water White Paper and its ideas for competition myopic.  In a world with the possibility of increased drought and, at the same time, increased flooding incidents, you are introducing competition to a strategic monopolistic industry who's main infrastructure was built by the Victorians?  It doesn't make sense to me.

Back to the original quote above - competition has existed, albeit in a limited area, since 2005.  It hasn't worked.  Is the solution right now really more competition?