The country's biggest water supplier, Thames Water, could be on the brink of collapse as it faces £14bn worth of debt. Consumer Editor Chris Choi reports
Thames Water could be nationalised by the government as it reportedly lies on the brink of collapse, in the face of a debt pile said to be worth £14bn.
Customers have been reassured by the government they will not lose supply if the company fails, while the government said it is preparing for a "range of scenarios".
Speaking in the House of Commons on Wednesday, water minister Rebecca Pow insisted the water sector as a whole is "financially resilient" and refused to comment on the speculation around Thames Water's future.
But when pressed by MPs, Ms Pow said there is "a lot of work going on behind the scenes" to ensure Thames Water customers "will not be impacted" if the company goes under.
She added: "And there is a process in place if necessary to move us to the next stage."
It comes after Thames Water's boss Sarah Bentley stepped down with immediate effect on Tuesday in the face of increasing concerns about the company's financial stability.
Ms Bentley, who was appointed in 2020, said in May she would give up her bonus after the company’s environmental and customer performance suffered.
After giving up the bonus, the chief executive managed to double her pay, raking in £1.5 million, which a national officer at the GMB union called "a flimsy PR stunt".
The company has faced public scrutiny in recent years for its poor performance in tackling leaks and sewage contamination, while handing out big bonuses to bosses and shareholders.
The water sector as a whole is 'financially resilient', insists water minister Rebecca Pow
Meanwhile, the water regulator Ofwat was among a group of regulators summoned to No.11 Downing Street on Wednesday to meet with Chancellor Jeremy Hunt about what they can do to help customers see the benefits of easing wholesale costs.
When pressed by ITV News, Ofwat's chief executive David Black refused to talk about the future of Thames Water, but said the regulator will "do it's best to protect customers' interests".
An Ofwat spokesperson later said it is in "ongoing discussions with Thames Water on the need for a robust and credible plan to turn the business around".
A spokesperson for Thames Water said it is working with shareholders to secure funds to turn the business around, on top of the half-billion pounds it raised from shareholders in March.
In a statement to shareholders, it said: "Thames Water received the expected £500 million of new funding from its shareholders in March 2023 and is continuing to work constructively with its shareholders in relation to the further equity funding expected to be required to support Thames Water's turnaround and investment plans.
"Ofwat is being kept fully informed on progress of the company's turnaround and engagement with shareholders."
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