“If Thames Water collapses into special administration – a form of temporary public ownership – we can fight to bring it into permanent public ownership. In doing so, we can set a precedent for the entire privatised water industry to follow.”
By Sophie Conquest, We Own It
The privatisation of water is a failed ideological experiment. Since 1989, shareholders have extracted over £85 billion from our water system – money which they made by hiking our bills; amassing mountains of debt and filling our rivers and seas with sewage.
Even by its own logic, water privatisation has failed. Thatcher intended privatisation to bring investment, and for water companies to be owned by British investors, and listed in London. The reality? Shareholders have literally invested less than nothing, and huge parts of our water system are owned by faraway investors, who do not have to suffer the consequences of a water system that has been run into the ground in the name of profit.
90% of water in the world is publicly owned. 8 in 10 of us want to see water in public hands. Public ownership is a pragmatic norm that the vast majority of us want. But how do we get there?
First steps: special administration of Thames Water
Thames Water is collapsing. It has amassed nearly £20 billion of debt, and has been in breach of its licence since July 2024, when its credit rating was downgraded to ‘junk’. Not to mention the many and glaring breaches of its environmental duties: Thames Water was responsible for almost one third of the sector’s most harmful water pollution incidents in 2025.
All of this makes Thames Water the weak spot in the armour of the privatised water industry. If Thames Water collapses into special administration – a form of temporary public ownership – we can fight to bring it into permanent public ownership. In doing so, we can set a precedent for the entire privatised water industry to follow.
For over a year now, Thames Water’s creditors – a group of US hedge funds – have been scrabbling to keep the utility in private hands. By offering a cash injection in return for outrageous asks around environmental leniency, they intend to maximise their gains by cutting expenses that would otherwise be spent on infrastructure investment and pollution fines. Both the Environment Secretary and water regulator Ofwat have objected to their most recent proposal.
Now the creditors are rushing to submit a fourth proposal. In this last-ditch attempt to keep the utility in private hands, they’re appealing to Burnham’s language of public control by offering a governmental ‘golden share’, and greater supervision from local authorities.
Of course, the promise of public control made by this offer is no more than an illusion. You need look no further than Royal Mail – which the government kept a golden share in when it was sold to Czech billionaire Daniel Křetínský in April 2025 – as an example of how golden shares do nothing to prevent increased prices and declining services.
Without question, the only acceptable way forward for billpayers and the environment is to reject the creditors, and place Thames Water into special administration.
A Special Administration Regime (SAR) is a form of temporary public ownership. It is a mechanism which exists for services which are so essential, they cannot be allowed to fail. Under SAR, the utility would be restructured to make it financially viable. This could and should include slashing the Thames Water’s debts. The previous Conservative government planned to slash the creditors’ debts by 40% – that was some time ago and the situation has worsened significantly since then, creating space for even greater cuts.
Thames Water should then exit special administration into permanent public ownership. A precedent was set for this in 2002, when Blair’s government used special administration to transition Railtrack into public hands.
The risks: what could happen after special administration
But special administration of Thames Water – which has been looking increasingly likely as Burnham begins his premiership – also poses real risks.
Foremost is the risk of re-privatisation: that a private buyer takes over Thames Water, after its finances have been stabilised by the government. Buyers like CKI – and the Thames Water creditors themselves – have already announced that they would be in line to buy the utility after special administration. This is what happened with Bulb, when it was acquired by Octopus Energy. This would be outrageous – socialising the losses at the expense of the taxpayer, while the gains are privatised – and a complete betrayal of Burnham’s promise to break with 40 years of privatisation.
Another significant risk is that we get renewed privatisation, but with a different name.
In July 2023, Severn Trent CEO Liv Garfield sent her fellow water company CEOs a ‘highly confidential’ email, suggesting that they consider repurposing utilities ‘into a new breed of declared social purpose companies – companies that remain privately owned, who absolutely can (and should) make a profit’.
There is a real risk that Burnham’s government will choose to use the language of ‘mutualisation’ or ‘not-for-profit’ for water companies, in order to obscure continued privatisation.
Welsh Water is run as a not-for-profit, and has amply demonstrated why this model should not be replicated. It actually does generate profit, just in a different way: billpayers’ money lines the pockets of faraway bondholders in the form of interest on loans, as opposed to dividend payouts for shareholders. Welsh Water has one of the highest financing costs in the sector, at 41%. And Welsh Water’s customers are footing the bill, with some of the highest bills in the UK. Welsh Water’s record on environment pollution is also abysmal.
In contrast, Scotland – where water is publicly owned – has the lowest bills in the UK, and Scottish Water invests, on average, 30-35% more per household per year than England and Wales.
There are also significant differences in democratic participation across these models. The ‘members’ who control the direction of Welsh Water are not democratically elected by – or accountable to – any of the households that the utility serves. In contrast, the Board of Directors of publicly owned Eau de Paris includes representatives for households, environmental groups and workers: public ownership can make water systems directly accountable to those who pay for it; rely upon it; and keep it running.
The path to permanent public ownership
If Thames Water is transitioned into permanent public ownership via special administration, there are several ways for the rest of the water sector to follow.
Thames Water is far from being the only failing water company. There is more than enough grounds to revoke the licenses of other failing water companies by bringing them into special administration. As with Thames, we can then transition them permanently into public hands. Under special administration, there is no requirement to compensate shareholders – who are responsible for the company’s failure – and substantial debt write-offs can take place.
We can also change the terms of water company licences. This is something like the 10 year blueprint for publicly owned water previously outlined by Burnham’s team. However, water companies – unlike rail franchises – don’t have expiry dates on their contracts. Their contracts are indefinite, with the added insult of a 25 year expiration period. But we could change this. By adding expiration dates to water company licences, we can return them to public hands without compensation.
There is also real regulation. The current regulatory system has failed abjectly. The spate of recent water boss bonus payouts under various disguises (such as United Utilities’ £435,000 ‘allowance’ for CEO Louise Beardmore) has exposed the farce of the Starmer government’s attempts to to control the privatised water industry through banning bonuses for failing water bosses, for example. However, if regulation was applied in earnest – with a zero tolerance approach to sewage spills – the scale of infrastructure investments required to comply would force many water companies to go bust. From there, we could bring them into public hands.
There is also the option to legislate for public ownership of water.
A new political and economic model
In his first speech as Prime Minister, Andy Burnham diagnosed the root cause of our current predicament: the centralisation of political power, and the privatisation of economic power. To resolve this, he promised a new political and economic model.
Whatever happens next for Thames Water – and by extension, our water industry as a whole – will be the first real test of whether Andy Burnham will keep that promise.
- We Own It is co-ordinating an open letter to new Environment Secretary Angela Eagle urging her to reject the creditors’ latest Thames Water takeover proposal. You can add your name here.
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