Andy Burnham looks at changing insolvency laws to help bring utilities under public control

Prime Minister Andy Burnham is looking at changing insolvency laws in order to bring key utilities such as Thames Water under public control, as part of his pledge to radically transform how water and energy companies are owned and run.

The Guardian reports that one possibility, ‘according to those briefed on his thinking, is to change the so-called special administration regime (SAR) to make it easier to put companies such as Thames Water into insolvency proceedings, and then take control of them afterwards.’

The water industry, with Thames Water in particular, has come in for criticism amid rising bills and a soaring number of pollution incidents. Thames Water is struggling with £20bn debt, while shareholders make profits and sewage spills rise and customers face rip-off prices.

The Guardian adds: “While Burnham has been clear on his desire to take Thames into public ownership, officials say there are two big problems with the special administration regime as it stands.

“The first is that companies can only be taken into administration if they are insolvent or unable to provide a basic level of service. Owing to continued support from a group of creditors hoping to take ownership of the company, neither of these are the case.

“The second is that once a company enters administration, the administrator is under a legal duty to maximise returns to the creditors, meaning that it will be difficult for the government to take ownership without paying a significant price.”

However, there may be a way forward Burnham, who is looking at changing the special administration regime altogether which includes mending the water bill to introduce new triggers for special administration, including lower financial ones and new environmental metrics.

Music to the ears of many.