MPs have renewed calls for Thames Water to be placed into a special administration regime (SAR) arguing it is the most straightforward way to address the company's mounting debt and the long-standing failures in its treatment and pipe networks.

MP for Witney Charlie Maynard urged the government to pursue the SAR on grounds of insolvency rather than on performance in the House of Commons yesterday, 14 July.

“Rather than having customers pay hundreds of millions of pounds of debt at ludicrous interest rates of nearly 10%, Thames Water should be taken into a special administration regime, which is commonly known as bankruptcy on insolvency grounds,” he said.

“I urge the government to pursue an SAR on the basis of insolvency, as this is a more straightforward way to secure special administration than on a performance basis, and it will give the special administrator additional powers and a stronger position in relation to the creditors.”

Last month, Thames Water moved closer to being taken back into public ownership, the BBC reported.

The utility provider is the country’s largest water and wastewater provider.

While the government has viewed nationalisation as a last resort, the company’s ongoing financial crisis – marked by a debt pile of approximately £19bn to £20bn – has meant it is a possibility.

The process of the UK Government taking Thames Water back into public ownership would likely occur with an SAR, a legal framework used if a water company becomes insolvent or fails to meet its statutory duties.

Throughout 2025, the debate intensified as Thames Water faced record penalties and failed investment attempts. In May 2025, Ofwat issued an unprecedented £123M fine for “systemic failure” in managing wastewater assets.

Shortly afterwards, the private equity firm KKR withdrew from talks to invest in the company, forcing Thames Water to pivot toward alternative rescue plans from senior creditors.

Maynard and other MPs pointed to repeated breaches of Thames Water’s operating licence as reason enough for the water company to be put on an SAR during the debate in parliament.

“The company has carried out more than 1,000 illegal spills over four years,” Maynard said.

“It must hold two investment‑grade credit ratings as a condition of its operating licence, but it last held any investment‑grade credit rating two years ago, in July 2024, and it has undergone a change of ultimate controller.”

Maynard went on to discuss how the government has failed to answer to this point.

“The environment minister, the secretary of state [for the environment] and Ofwat have repeatedly refused to answer on that point,” he said, continuing to argue that an SAR would allow for a substantial write‑down of debt, “very likely into single‑digit billions”.

Maynard and other MPs believe this will leave the company with the finances to fund the extensive investment in its infrastructure that is needed over the next decade.

MP for Woking Will Forster discussed how the frequent failures posed by Thames Water are proof it must be put into an SAR.

“We need Thames Water to go into special measures, so that it can invest in infrastructure,” he said.

“In my constituency, Thames Water has closed a road for three weeks in Horsell because it has not invested, and it dumped over 1,115 hours‑worth of sewage last year into our River Wey. That lack of investment is why we need what [Maynard] is calling for today.”

The government and water regulator Ofwat have the power under the Water Industry Act 1991 to apply to the High Court for an SAR when a company is unable to pay its debts.

Maynard criticised the lack of a published SAR assessment policy from government. He said the lack of clear tests weakens both investor certainty and the government’s negotiating position with major creditors.

Maynard cited the independent Cunliffe review, which recommended a clear policy and “broad, judgement‑based tests” for assessing failing companies.

Under-Secretary of State at the Department for Environment, Food and Rural Affairs (Defra) Emma Hardy was also present during the debate.

She outlined the steps Labour has stated it has taken since entering government, including the Water (Special Measures) Act 2025, tighter enforcement and new criminal offences for pollution cover‑ups.

She also challenged misconceptions regarding SARs.

“Some suggest that placing a company into special administration would simply allow the government to take over and run the company directly,” she said.

“That is not how the regime works. A special administrator is appointed by a court and has specific legal duties and objectives.

“It must manage the company’s affairs, businesses and property for the statutory purposes set out in the Water Industry Act.”

A Thames Water spokesperson said: “We continue to work with all parties to reach an agreement that supports Thames Water’s long-term financial stability and ensures the uninterrupted delivery of our biggest infrastructure upgrade in 150 years while continuing to meet the needs of our 16M customers.”

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