To ask the Secretary of State for Environment, Food and Rural Affairs, what criteria his Department uses to determine whether water companies have failed to carry out their (a) statutory functions and (b) licensed activities to such an extent that his Department would apply to the High Court for them to be placed into special administration under the provisions of the Water Industry Act 1991.

The Defra Secretary of State and the Water Services Regulation Authority (Ofwat), with consent of the Secretary of State, have the power to request the court to place a company in a special administration regime (SAR) so that its business can either be rescued or transferred as a going concern to new owners. Section 24 (2) of the Water Industry Act 1991 sets out the legal parameters for which a SAR can be applied for.