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Defra’s response to reports on Thames Water

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The River Thames at Lechlade in the Cotswolds

There has been widespread reporting in recent days on Thames Water and its financial position.

This is a matter for the company, which has reiterated that it is working constructively with its shareholders and continues to maintain a strong liquidity position, including £4.4 billion of cash and committed funding, as at 31 March 2023.

The economic regular Ofwat has noted that the sector continues to attract international capital, with an additional equity injection of around £2bn since 2020.

Within government we always prepare for a range of scenarios across our regulated industries, including water, and remain in close contact with Ofwat.

A Government spokesperson said: 

This is a matter for the company and its shareholders.

“We prepare for a range of scenarios across our regulated industries - including water - as any responsible government would.

“The sector as a whole is financially resilient. Ofwat continues to monitor the financial position of all the key water and wastewater companies.

An Ofwat spokesperson said:

Over the last day or so, there has been a lot of commentary about financial resilience in the water sector with considerable focus on Thames Water in particular.

We have been clear that Thames Water has significant issues to address – their environmental record and leakage performance, for example, are poor. Alongside the turnaround of their operational performance, they need to improve their financial resilience too.

But that is all in the context of a company that has strong liquidity – it recently received an additional £500 million from shareholders and has £4.4bn of cash and committed funding.

Overall, the sector is continuing to attract international capital and is especially attractive to long term investors such as pension funds. Indeed, there has been an additional equity injection of around £2bn since 2020, with companies acting to strengthen their financial position.

Ofwat will continue to keep companies' financial resilience under close scrutiny and work with companies to ensure they take action to ensure that they have the financial backing to deliver for customers and the environment.

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  1. Comment by Roger Cartwright posted on

    Water is a 'common good' and I did not vote for the government that decided it might perform better in private ownership.
    It was obvious at the outset (over 40 years ago) that this was a bad idea and over the years this has been confirmed by insufficient investment in all the work and future planning needed and the inevitable priority given to the financial interests of shareholders and senior management!!!

  2. Comment by John W Baxter posted on

    Would I be correct in thinking from these statements that I , as a water company customer served by Ofwat and HM Government will be protected from any water company failure in which I hold no shares.
    If I am paying my water bill and feel I am being shortchanged by my government in allowing these water companies to dump billions of litres of untreated waste water with impunity as it is legal to do so, then I feel I only have one route to protect my interest and that is to vote for a more protective future government that will serve my interests with no demands for price increases until capital has been spent by investors to clean up my back yard.

  3. Comment by Michael Hughes posted on

    Water privatisation has been a disaster and both the Government and Ofwat have failed in their duty to us, the paying public. So much for all the heady assurances when control of this essential utility was handed to the exploitive money-makers