Incoming Prime Minister Burnham Expected to Place Thames Water Under Special Administration

Incoming prime minister Andy Burnham is expected to place Thames Water into a special administration regime upon taking office, The Independent reported. The move would keep essential services running while a buyer is sought and could leave taxpayers responsible for an estimated £2 billion in funding through 2027.

Thames Water, which serves 16 million customers in London and the South East, has warned it will exhaust its cash by the end of 2026 absent a rescue agreement with creditors and the government.

The company posted a pre-tax profit of £226.4 million for the year to March 31 after recording a £1.65 billion loss the prior year, while its debt rose to £19.77 billion from £17.73 billion. Burnham has outlined a 10-year plan for greater public control of the water sector rather than immediate full nationalization.

Speaking in Makerfield in June, he said the industry “is broken” and “run with the private vested interest,” adding that Thames Water presents “a very strong case for public ownership to sort out its problems” while other regions could follow a different timetable.

Environment Secretary Emma Reynolds last month rejected a £10 billion creditor proposal as insufficient to protect customers and the environment. Creditors are now discussing an extension of funding into 2027, and Ofwat had been close to accepting an offer from the London & Valley Water consortium that included a four-year waiver on new sewage fines.

Chris Weston, Thames Water’s chief executive, called for urgent clarity from the incoming government.