Water Companies: Insolvency

Department for Environment, Food and Rural Affairs written question – answered at on 14 May 2024.

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Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

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.

Photo of Robbie Moore Robbie Moore The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

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.

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