Burnham eyes overhaul of insolvency rules to push utilities like Thames Water into public hands

Prime Minister Andy Burnham is considering amending the UK’s insolvency framework, specifically the special administration regime, to facilitate the transfer of key utilities like Thames Water into public ownership. The government’s ten-year agenda to bring water and energy services under stronger public control drives the push, with officials saying the sector has consistently underperformed for consumers. Under current rules a company can only enter administration if insolvent or unable to provide basic service, conditions Thames Water does not meet due to creditor support.

Changing the regime could also allow a “bail-in” mechanism that forces shareholders and creditors to absorb losses before taxpayers. Labour backbenchers and the Good Growth Foundation have drafted amendments to the upcoming water bill to lower financial triggers and add environmental criteria. Creditors, many of whom are US-based hedge funds, have warned they will seek judicial review, arguing the move would undermine investor confidence and shift risk to customers.