Andy Burnham wins Makerfield by-election

Following Andy Burnham’s victory in the Makerfield by-election and return to Westminster, we welcome his call for Government intervention in Thames Water as it is an important contribution to ending England’s water industry scandal.

Burnham’s intervention comes as concern grows within the Government over Thames Water’s future. This week, the Secretary of State for the Environment opposed the company’s latest £10 billion market-led rescue plan, saying it “doesn’t do enough to protect consumers and the environment”.

These developments reinforce the need for a fundamental reset of the water industry, starting with Thames Water.

Why has Special Administration not been triggered?

The statutory Special Administration Regime (SAR) remains the most effective mechanism for intervention when water companies fail. We’re calling on ministers to explain why the regime has not already been used to fix Thames Water and it’s why we are pursuing a judicial review challenging the Government’s failure to publish a policy explaining when special administration will be considered and used.

Thames Water represents the clearest possible case for special administration. The company is burdened by almost £20 billion of debt, continues to seek emergency financing, has repeatedly breached environmental laws and regulatory obligations, and is increasingly focused on complex and costly refinancing and restructuring arrangements rather than delivering the improvements customers and rivers urgently need.

Reports suggest Thames Water’s latest restructuring proposals could involve up to £749 million in fees, interest and advisory costs payable to creditors, bankers and lawyers. At the same time, the company remains a serial polluter, discharging sewage into waterways for more than 123,000 hours across its catchments since 1 January 2026, and has asked the regulator to allow them to pollute without new Ofwat fines until 2030.

Commenting on Burnham’s intervention, CEO of River Action, James Wallace said:

“Andy Burnham is right: Thames Water cannot continue as it is. The company is burdened by almost £20 billion of debt, continues to profit from polluting rivers and is yet again being fought over by distressed asset cowboy investors rather than owned and run as a public utility for public benefit and environmental protection.

“While financiers negotiate rescue deals worth billions and advisers stand to collect hundreds of millions in fees, sewage continues to flow into rivers and customers are left paying the price.

“Parliament created the Special Administration Regime for precisely this situation. If not Thames Water, and if not now, then who and when?”

The thresholds for Special Administration need to be set

Parliament created SAR specifically to deal with failing water companies, yet ministers have still not set out clearly the thresholds or factors for when the regime will be used. The campaign group believes Thames Water’s financial, operational and environmental failures provide ample evidence for the Environment Secretary or Ofwat to apply for a SAR. River Action also argues that greater transparency is needed so that special administration is a credible backstop when water companies fail to meet their obligations or cease to be financially resilient.

SAR offers the most effective route to stabilising Thames Water while protecting customers, safeguarding essential services and prioritising environmental recovery. It’s designed to keep services running while enabling restructuring in the public interest. With options on the other side of a SAR including mutual, municipal and public ownership models, all of which have been tried and tested across Europe, SAR should be seen as an opportunity to a better model with better outcomes, not as a threat.

The Government and Ofwat needs to place Thames Water into a Special Administration Regime to protect 16 million customers and the environment, restore public confidence and begin the transition away from a profit-first to public-first utility.

FAQs

What is the Special Administration Regime?

The Special Administration Regime, usually shortened to SAR, is a legal process designed to protect essential public services when a water company gets into serious financial or operational trouble.

Who has the power to place a failing water company into Special Administration?

For water companies in England and Wales, the Secretary of State for Environment or Ofwat as water regulator (with the Secretary’s approval) have the power under section 24 of the Water Industry Act 1991 to ask the High Court to place a water company in special administration on either insolvency or performance grounds.

What is the purpose of Special Administration?

Special administration is a temporary insolvency and controlled restructuring process for companies that provide essential public services like water, energy or transport. Its purpose is to allow the Government to secure continuity of essential services, stabilise a failing company and restructure its finances and governance, while making available a range of options on exit, including mutualisation or not-for-profit or public-interest ownership models using less extractive financial models with lower costs of debt.