My honourable friend the Minister of State for Transport, Stephen Ladyman, has made the following Ministerial Statement.
I am today announcing the publication of a report on future reform of the trust port sector. More than 50 ports in England and Wales are trust ports; independent statutory bodies, governed by unique local legislation and controlled by an independent board rather than shareholders. While many trust ports are no longer commercially active, the many that are include Dover and Milford Haven—two ports of prominent national significance—as well as other major ports such as the Tyne and the Port of London Authority with its vital conservancy duties in the Thames Estuary.
The department wished to understand better how to optimise the efficiency and accountability of the major trust ports, and to this end in January 2007 appointed PricewaterhouseCoopers LLP (PwC) to carry out a study of the sector, including an analysis of the ports' efficiency, accountability to stakeholders and options for voluntary corporate restructuring. While the study concerned primarily the six largest commercial trust ports, its findings will be of interest to all trust ports and to the wider ports industry.
In broad terms, the report concludes that the trust model retains a legitimate role within a mixed ports sector but that, in the absence of shareholders, trust ports should do more to identify, and account for, the use of their profits—what the report terms their “stakeholder dividend”. The report also concludes that, while the largest trust ports operate on a sound commercial basis, in some cases their financial performance falls short of that of their private sector comparators, and recommends a series of measures to ensure that these important pieces of national infrastructure are able to meet their potential. Levels of accountability among trust ports are also found generally to be good, but with room for improvement, and the resultant recommendations point towards enhanced reporting and updated governance arrangements. PwC explored various voluntary options for structural change including the creation of an operating subsidiary below the level of the trust board, which could involve private sector participation.
The study represents a valuable contribution to the debate on the trust port sector. The various recommendations contained in the report have been considered and the Government will bring forward refreshed guidance for trust ports in England and Wales later this year, following further discussion with the industry based on these recommendations. Copies of the report are available in the Libraries of both Houses.