wrans/answers2025-05-15 conversation_247
Source: hansard.parliament.uk (2025-05-15)

UK Parliament Hansard data: wrans/answers2025-05-15 conversation_247

Martin Wrigley:To ask the Secretary of State for Environment, Food and Rural Affairs, if he will require additional public reporting from water companies placed into (a) special measures or (b) special administration. \p Emma Hardy: Ministers and officials have regular discussions with a range of stakeholders, and representatives, on various issues, including issues related to the water sector in England.

As part of our Plan for Change, we have delivered on our promise to put water companies under special measures through our landmark Water (Special Measures) Act 2025 (WSMA). In addition to providing the regulators with the most significant increase in enforcement powers in a decade, the WSMA also introduces new reporting requirements to improve transparency around water company operations. This includes:

Ofwat, as the independent economic regulator for the water and sewerage industry in England and Wales, has a duty to ensure water companies comply with their statutory obligations and are adequately financed. This includes both environmental and financial obligations.

Where Ofwat assesses companies have failed to meet their statutory or licence obligations, Ofwat have the power to take enforcement action, through an enforcement order or financial penalty (up to 10% of a company’s annual turnover).

We have overseen the launch of an Independent Commission into the water sector and its regulation, in what is expected to form the largest review of the industry since privatisation. The Independent Commission will review the roles and responsibilities of the water industry regulators; once the Commission has made recommendations to the UK and Welsh governments, both will respond and consult on proposals, including potential legislation.

A Special Administration Regime (SAR) enables a company which provides vital public services (e.g. water, energy, rail) to be put into administration in certain circumstances, to ensure that the public service will continue to be provided pending rescue (via a means such as debt restructuring) or transfer (via a sale) to new owners.

A water company in special administration would be subject to the same regulations as the rest of the sector. This includes following its statutory and environmental obligations.

We expect that following the conclusion of a SAR Government would recoup the funds it had spent financing it through the sale of the water company, with Government funding provided during a SAR taking priority for repayment before most other creditors.

On reporting during an administration, Ofwat monitors the financial position of all water companies and takes action to enable water companies and their investors to strengthen their long-term financial resilience within the context of their licence and broader statutory obligations.

Within a SAR a company would to be subject to the same regulatory requirements, and annual account publication requirements as any other water company. The company’s performance will also continue to be monitored and published by Ofwat and the Environment Agency.