Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, what assessment she has made of the potential impact of the Water (Special Measures) Act 2025 on the (a) criteria and (b) process for placing a water company into Special Administration.

Answered by Emma Hardy - Minister of State (Department for Environment, Food and Rural Affairs)

Sections 14 and 15 of the Water (Special Measures) Act introduced new powers for the Secretary of State and Welsh Ministers to modify water company licences to recover any shortfall following the provision of financial assistance to a company in special administration. Additionally, section 16 of the Water (Special Measures) Act ensures that, should a water company’s creditors apply to the court for the company to be wound up, 14 days’ notice would have to be given to the Secretary of State or the Welsh Minsters and Ofwat.

Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, what estimate her Department has made of the cost to (a) customers and (b) the public purse of placing a water company into (i) Special Administration and (ii) continued private restructuring.

Answered by Emma Hardy - Minister of State (Department for Environment, Food and Rural Affairs)

The costs of a SAR would vary significantly depending on the circumstances of the individual company, including the duration of the special administration, the company's operational and financial position, and the arrangements required to ensure continued delivery of water and wastewater services. The costs of a private sector restructuring would likewise depend on the specific terms of any restructuring proposal and the funding commitments made by investors and creditors.

Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, what discussions her Department has had with Ofwat on the threshold for recommending Special Administration for a water company.

Answered by Emma Hardy - Minister of State (Department for Environment, Food and Rural Affairs)

Defra works closely with Ofwat on issues of financial resilience and performance across the water sector through regular engagement.

Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, what metrics her Department and Ofwat use to assess whether a water company has failed to meet its statutory obligations under the Water Industry Act 1991.

Answered by Emma Hardy - Minister of State (Department for Environment, Food and Rural Affairs)

Water companies' principal statutory duties are set out in the Water Industry Act 1991. Under section 37 of the Water Industry Act 1991 a water company has the duty to ensure the supply of water within its area of appointment and to develop and maintain an efficient and economical supply system for that purpose. In addition, under section 94 of the Water Industry Act 1991, a water company that also holds a sewerage appointment has the duty to effectually deal with the contents of sewers and provide the necessary infrastructure for that purpose.

Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, what definition her Department uses of a failing water company for the purposes of regulatory intervention.

Answered by Emma Hardy - Minister of State (Department for Environment, Food and Rural Affairs)

All regulatory intervention is considered based on the specific facts and circumstances at the time.

Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, whether persistent sewage discharges in breach of permit conditions constitute evidence of failure by water companies for the purposes of regulatory intervention, including Special Administration.

Answered by Emma Hardy - Minister of State (Department for Environment, Food and Rural Affairs)

Environmental Performance Assessment and persistent sewage discharges in breach of permit conditions may each be relevant factors for the purpose of a number of different regulatory interventions by Regulators and, if needed, Government.

Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, whether a company's environmental performance rating as assessed by Ofwat's Environmental Performance Assessment forms part of the criteria for determining regulatory failure.

Answered by Emma Hardy - Minister of State (Department for Environment, Food and Rural Affairs)

Environmental Performance Assessment and persistent sewage discharges in breach of permit conditions may each be relevant factors for the purpose of a number of different regulatory interventions by Regulators and, if needed, Government.

Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, what assessment she has made of the difference between grounds for special administration based on (a) insolvency and (b) performance failure in relation to Thames Water.

Answered by Emma Hardy - Minister of State (Department for Environment, Food and Rural Affairs)

The statutory grounds for placing a water company into a Special Administration Regime (SAR) are set out in the Water Industry Act 1991 and apply consistently across all water companies.

Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, what level of debt-to-equity ratio and other financial resilience thresholds her Department considers indicative of a water company's failure to manage its affairs.

Answered by Emma Hardy - Minister of State (Department for Environment, Food and Rural Affairs)

Ofwat issues clear guidance on efficient debt-to-equity ratios and on higher debt-to-equity ratios which are inconsistent with good financial resilience. It considers that 55% is an efficient ratio and that gearing above 70% may present a risk to long-term financial resilience. Some water companies have significantly higher debt than these thresholds. In the Water White Paper, the Government committed to consider how the regulator can work with companies and investors to ensure companies do not accumulate unmanageable levels of debt.

Royal National Lifeboat Institution (RNLI) rescue operations

Found: telecoms Committed South East England Tilly and the Buttons London SE21 8EN Other Committed London Tim Farron