Key facts
- Andy Burnham has halted plans to place Thames Water into a special administration regime.
- Concerns over the potential cost to taxpayers, estimated to be billions of pounds, are the primary reason for the pause.
- A report suggested an 18-month administration could cost £4.1 billion.
- Thames Water is struggling with a debt pile of nearly £20 billion.
- Creditors are proposing a board shake-up for the struggling utility company.
Andy Burnham has decided to pause plans to place the struggling utility company Thames Water into a special administration regime (SAR) due to concerns over the significant costs to taxpayers. The government had been considering the SAR as a way to take partial control of the company until a buyer could be found, a move that Burnham had championed as a way to increase public control over utilities.
Government officials have expressed worries that the cost of such an administration could run into billions of pounds. Reports suggest the initial cost could exceed £2 billion, with a 2024 analysis by Teneo estimating an 18-month SAR could cost £4.1 billion. These financial and legal risks have led ministers to back down from immediate action, with further work being done to explore potential solutions.
Meanwhile, creditors vying for control of Thames Water have put forward their own plans. The London & Valley Water (L&VW) consortium, which includes investors Apollo and Elliott, announced it would appoint former heads of Yorkshire Water and BT Openreach as non-executive directors. They would be joined by turnaround specialist Mike McTighe and former civil servant Dame Bernadette Kelly. Thames Water is currently grappling with a debt pile of nearly £20 billion and has warned it could run out of cash by the end of the year.