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Director Tom Davey comments on insolvency and the UK water industry in Law360

Director Tom Davey comments on the insolvency crisis facing the UK water industry, as utilities providers such as Thames Water and Southern Water attempt to raise investment in a bid to stave off the threat of administration or renationalisation.

Tom’s comments were published in Law360, 19 February 2025, and can be found here.

“The perilous state of UK water utilities continues to make headlines. The competing priorities of stakeholders has now been revealed in an unflattering light where it appears as though companies and their investors have left a mess of overleveraged borrowing and spiralling debt with little sign of infrastructure improvements to cater for the UK growing water demand.

“In the 1980s, the profit motive of the private sector was seen as a positive – bringing investment and good corporate governance and efficiencies into state run monopolies. The reality, however, has been different. Investors stand accused of stripping profit and assets and leaving behind debt with the threat of renationalisation looming.

“Some companies are accused of malpractice where premiums for services are charged in exchange for a good environmental record with consumer representatives, claiming this could not be further from the truth as sewage wreaks havoc on the UK’s waterways.

“It is hard to see a future for this industry beyond the increasing costs and continued uncertainty, as consumers are penalised for the missteps of the this mismanaged industry and weak regulation.”