Andy Burnham is set to put Thames Water, Britain’s biggest water company, into a special form of administration.
Thames Water, which supplies some 16 million customers from Gloucestershire to London, Kent and Essex, has warned that it will run out of cash by the end of the year unless a deal can be agreed between its creditors – which are owed £17bn – and a group of investors, the water regulator Ofwat and the Government.
In his first speech as Labour leader on Friday, the incoming Prime Minister pledged to take greater “public control” of Britain’s utilities. His plan to put the water company into a special administration regime (SAR), which allows essential services to keep running until a buyer is found, suggests his team does not believe a viable deal can be agreed between Thames Water and its creditors.
It would mark a first-ever emergency SAR for a water company and risks leaving the taxpayer with a £2bn bill in order to keep Thames Water afloat until the end of next year, unless an alternative solution is found. A Burnham ally told The Sunday Times: “If it is going to cost the taxpayer £2bn to keep the company afloat then the taxpayer needs to receive something in return; that means control, so that we can fix the company and secure the water supply for thousands of families and businesses.”
