Stop Thames Water rescue deal, MPs tell Burnham

By the Editorial Team · Friday, September 18, 2026

A group of MPs has called on the government to halt a £10 billion rescue plan for Thames Water and instead pursue public ownership to address the utility’s financial instability. They argue that the current proposal by a creditor consortium prioritizes short-term gains over sustainable operations, urging the use of special administration to protect public and environmental interests.

A group of MPs has urged the government to abandon a £10 billion rescue plan for Thames Water and called on Prime Minister Andy Burnham to proceed with public ownership of the utility. The cross-party Environment, Food and Rural Affairs Committee expressed concerns that the proposed takeover by a consortium of over 100 creditors, known as London & Valley Water, does not prioritize the long-term interests of the public, the company, or the environment.

Thames Water, Britain’s largest water supplier, is currently burdened with approximately £20 billion in debt and is projected to run out of funds by the end of 2026. The company estimates it requires an additional £2 billion to maintain operations through the following year. The MPs highlighted that ongoing fines related to poor performance are limiting Thames Water’s ability to invest in necessary infrastructure improvements, with penalties expected to total around £900 million over the next five years.

The consortium behind the rescue plan collectively holds around £17 billion of the utility’s debt, comprising primarily US-based investment firms. However, the committee criticized the group for its lack of transparency and described it as seeking to extract immediate value rather than guiding the company toward sustainable success.

Alistair Carmichael, Liberal Democrat chair of the committee, said the consortium did not appear to act in the public’s interest, suggesting that placing Thames Water into special administration might be the only viable way to reset the company’s trajectory. Special administration would involve the government covering the company’s running costs while seeking a more suitable buyer.

Burnham had been anticipated to use special administration powers soon after taking office, but reports suggest he has reconsidered amid government concerns over potential legal challenges and the significant financial risks to taxpayers. The collapse of a previous proposed deal with the US private equity firm KKR last year has left few options on the table, contributing to the rescue plan’s portrayal as the last credible alternative to special administration.

The government has been approached for comment but has yet to respond. Meanwhile, MPs continue to pressure officials to prioritize long-term stability and environmental considerations over short-term financial interests as they seek a resolution to Thames Water’s deepening financial crisis.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.