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

To ask the Secretary of State for Environment, Food and Rural Affairs, whether her Department has contingency plans in place to ensure the continued operation of (a) water supply and (b) sewage treatment and processing in the event of a water company no longer being able to fulfill its financial obligations.

Ofwat and the Government take the financial resilience of the water sector very seriously. Ofwat reports annually on the sector's financial resilience and has taken steps in recent years to strengthen the sector's position. This includes action to update the ring-fencing provisions in water company licences to better safeguard the interests of customers and barring water companies from making pay-outs to shareholders and removing money or assets from the business if they lose their investment credit grade rating.

In the event that a water company is no longer able to fulfil its financial obligations, the Secretary of State and Ofwat have powers to apply for a special administration on insolvency grounds. This process would ensure that water supply and sewerage services would continue until the water company is transferred to new owners.