ICSM Business Insolvency News for Utilities: Ed Davey ‘let Thames Water enter administration now’

By Harry Mottram: The agony for suppliers, contractors, staff and customers of Thames Water continues as the utility giant struggles to avoid drowning in its £20bn sea of debt.

Ian Carrotte of ICSM whose members include those affected by the ongoing crisis at the water utility said there seems no realistic prospect of the privatised company surviving in its present form. He said: “If it was any other business, say a publishing or printing firm or even a local authority, it would have gone into administration by now. The consortium of London & Valley Water and which includes Elliott Management and Apollo Global Management which has put together a rescue plan is no nearer to saving the business from the inevitable as interest alone on the loans add hundreds of thousands of pounds in debt week by week.”

Now the leader of Britain’s third largest political party Ed Davey (pictured by Sky News) of the Liberal Democrats has called on the Government to act and place the utility in special administration. He is reported to have said when Thames Water had wanted to hike prices for customers: "It's really time that people were tougher on Thames Water and we think it's time to pull the plug and put them under administration.”

And MP for Hampshire Clive Jones, who was elected in 2024, said: "Financially, they are on their way to going bust. It needs to be restructured so we have a public interest company."

Thames Water said in reply: "For us to continue to deliver billions of litres of clean water and take wastewater away from millions of homes, it's vital that we invest in our network and infrastructure over the next five years. We offer comprehensive support for customers struggling to pay their bill, rated among the best in the sector.

"We're already helping around 450,000 customers pay their bills, and by 2030, one in ten households will be in receipt of support, including a discount of 50 per cent on their bill. We would encourage any customer who is concerned about their ability to pay to reach out to us so we can assess the right package of support for their circumstances."

The company had sought a 53% increase to customer bills between 2025-30. Ofwat allowed 35%.

Ian Carrotte said the fear was if there was hike in interest rates or a surge in inflation then the deal being put together to ‘steady the ship’ could come to nothing and that the one thing that is needed is certainty. There has been an ongoing debate over the future of the utility with some commentators saying the company should be allowed to fail and the owners, lenders and shareholders to lose their money. That isn’t as simple as it sounds as there would be a need to for the Government to pay off some of the debts – which is the reason they are not keen to nationalise Thames Water fully if possible. A special administration is a half way house.

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