Comments come after Andy Burnham says he would renationalise water and other businesses as PMInvestors in Thames Water have told the Labour government that a temporary nationalisation of the embattled company would slow its turnaround, after calls from Andy Burnham to put key utilities under public control.As Keir Starmer’s grip on power appeared to be fadin
Thames Water will run out of money by November without new investment, but says it is on the brink of agreeing a rescue deal with Ofwat.
Photograph: Graeme Robertson/The Guardian View image in fullscreen Thames Water will run out of money by November without new investment, but says it is on the brink of agreeing a rescue deal with Ofwat.
Photograph: Graeme Robertson/The Guardian Thames Water investors say temporary nationalisation would slow its recovery Comments come after Andy Burnham says he would renationalise water and other businesses as PM Investors in Thames Water have told the Labour government that a temporary nationalisation of the embattled company would slow its turnaround, after calls from Andy Burnham to put key utilities under public control .
As Keir Starmer’s grip on power appeared to be fading, the Greater Manchester mayor suggested at the weekend that the renationalisation of water and energy would form part of his policy agenda should he become prime minister.
Thames Water will run out of money by November without new investment, but says it is on the brink of agreeing a rescue deal led by creditors with the water regulator, Ofwat. It would require six weeks of consultation over the summer and then about a month to consider responses before it can go ahead.
Without a deal, the company could be placed in a “special administration regime” under which a government-appointed administrator takes charge – a process regarded as a form of temporary nationalisation.
The London & Valley Water consortium, a group of Thames Water creditors involved in its rescue deal, said such an approach would make fixing the struggling company harder.
“Thames Water urgently needs £10bn to stabilise the company, fund significant improvements for customers, clean up local rivers and achieve full compliance as quickly as possible,” the group said in a statement.
“With a highly credible market solution ready to implement, creating further delay with special administration is not the right answer. It will only restart the process of fixing Thames Water after two years of hard work, increase uncertainty for employees, destabilise the supply chain, delay the turnaround and make it harder to deliver the improvements customers deserve.” The consortium told the Sunday Times, which first reported its concerns, that its plan was “the fastest and most reliable route to solving Thames Water’s complex problems, without any government funding or cost to taxpayers”.
Under Starmer’s leadership the government, including the chancellor, Rachel Reeves, have expressed support for an industry solution to Thames Water’s woes.
‘People yearn for stability’: the Thames Water sewage plant at frontline of its crisis Read more Some expected challengers for the Labour leadership, however, including Burnham, have expressed support for nationalising water companies after years of industry problems.
He told Channel 4 News on Saturday that a “different path completely” was needed to decades of deindustrialisation and privatisation in Britain. “What is that path? Put more things back under stronger public control: energy, housing, water, transport,” he said.
Investor concerns about Burnham’s attempt to return to parliament in a byelection and to challenge Starmer spurred a sharp fall in the share prices of listed water companies on Friday. Severn Trent and Pennon, which owns South West Water, fell by more than 8% and United Utilities was down by more than 6%.
Thames has been trying to stave off financial collapse for more than two years , after building up a £17.6bn debt in the decades since its privatisation. Bosses tried to sell the company last year but faced embarrassment when their preferred bidder, KKR, pulled out of the deal at the last minute.
Ofwat is reportedly poised to accept what are known as “undertakings” from the company, which would lead to it committing to fix the issues that caused the original problem rather than paying a penalty to the government.
There are pressures, however, on the potential deal, which was first put to the regulator in June 2025.
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