Windrush Against Sewage Pollution (WASP) is a small charity working to call Thames Water (TW) to account over its continued pollution of our rivers. It is supported by We Own It and the local MP for Witney, Charlie Maynard. Late last December, they delivered a letter to the High Court to ask how they, in the interests of customers, could be heard alongside the company and its creditors.
At the hearing beginning on the 3rd February, a High Court judge will decide whether to permit TW’s restructuring plan which would allow it to incur up to a further £3bn in debt, repaid at 9.75% interest plus high fees. This will inevitably have a serious financial impact on customers.
Thames Water in deep financial water
TW’s customers already pay about 33p in every pound of their annual bills simply to finance a massive burden of debt, estimated at almost £19bn taken on by the company since privatisation. Before Christmas, the water industry regulator for England and Wales, Ofwat, announced that TW could raise bills by 35% by 2030, although the company said that was not enough for it to return to a sustainable footing.
Campaigners argue that the company has demonstrably failed to invest in infrastructure or meet its environmental obligations. Yet it has paid dividends of more than £5bn to its shareholders and high salaries to its executives. The CEO of TW, Chris Weston, receives a total pay package of up to £2.3M. Sewage pollution is still unacceptably high as WASP and our ongoing Sewage Watch feature demonstrate.
Recently, TW’s credit rating was slashed by Moody’s while potential administrators were said to have been approached by the government. Moody’s said that it downgraded TW as it believes its proposed financial plans “do not provide an attractive risk-return balance for existing or new investors”. Furthermore, in December 2025, Ofwat issued a provisional decision to fine TW £18.2M for paying “unjustified dividends”.
The legal challenge
WASP argues that the proposed terms of the restructuring plan are not financially sustainable in the mid- or long-term for TW, its licensed functions, and activities. The proposed plan only acts as bridge finance, and at significant cost, which ultimately will be paid by customers. It does not offer any sustainable solution for TW to continue as a going concern or for the mid- to long-term provision of water and sewage services to customers.
WASP’s proposal – special administration
Rising public outrage at the performance of water companies, the large amounts of filth and raw sewage being discharged into our waterways, and the proposed increased costs to billpayers comes as the government faces pressure to use its special administration powers (SAR). New rules for these have been introduced to maintain the continuity of service in the event of a private sector company in the industry becoming insolvent. WASP is calling for this measure to be put in place.
A SAR, they argue, is fairer and better for the companies, the environment, and the public who foot the bills. It would mean that creditors and shareholders would pick up the tab for the accumulated debts while the firm would be transferred into public ownership. Rising public outrage at the performance of water companies and the proposed increased costs to billpayers comes as the government faces pressure to use its special administration powers in the event of TW’s insolvency.
WASP also contends that the company’s restructuring plan does not make sufficient provision for TW to comply with or have appropriate governance for its statutory, regulatory, and environmental obligations. TW has numerous regulatory infringements and criminal convictions and continues to operate illegally at many sewage treatment works despite having received funding to rectify them. The restructuring plan does not attempt to resolve these issues and is likely to make them worse.
The alternative of special administration is a better and fairer procedure to enable TW’s functions and activities to continue as a going concern whilst alternative and long-term solutions are found. This would be in the public interest and that of the 16 million customers served by TW in London and across the Thames valley region.
How much?
On Tuesday 4th February, the barrister acting for Charlie Maynard MP, questioning witnesses, established from TW’s Chief Finance Officer that the fees paid by TW for the process being examined in the court were eye-watering and could rise as much as £210M including “reasonable costs” being covered for its creditors. In closing submissions to the court on Thursday, Mr Maynard’s team argued that the emergency debt package would worsen the “Thames Water debt doom loop”. In fact, less than £500m of the £1.5bn debt would be “real liquidity actually available” to Thames Water to support its operations or maintain drains and sewers, according to estimates by Maynard’s legal team. The court also heard that TW had failed to disclose the true costs of the debt package it is seeking.
Missing: Ofwat and the government minister
Summing up on the final day of the hearing, Mr Justice Leech said, “It would have been nice, I think, if either Ofwat or the Secretary of State had felt the need to turn up and explain the position to the court.” It does seem extraordinary that at such a significant moment for the company and for all its customers, of vital importance to the entire country, they did not bother to attend. Ofwat declined to comment. A spokesperson for the Department for Environment, Food & Rural Affairs said, “The government is closely monitoring the situation, and it would be inappropriate for the secretary of state to comment further on ongoing legal proceedings or private company financial matters.” The immense costs of this hearing would have been avoided if the government had stepped in much earlier when it became clear that TW was in such a dire position, staggering under the massive weight of debt with an ageing sewage network that has caused so much sewage pollution. The judge is expected to reach a decision later in February.
Pouring oil on troubled waters
WASP’s contribution to the hearing at the High Court is an important and potentially defining event. Ash Smith, who is one of the charity’s key members, writes in his blog:
“Ending sewage pollution, discharging better quality effluent, better public health protection, safer bathing waters, healthier rivers, lakes and coastal waters, supporting genuinely sustainable economic growth and housing, providing better value for money, better resourcing and working conditions for embattled water company employees, taking out the motives to cheat and pollute for profit, making regulators’ work achievable, directing all customers’ and developers’ money to the business, not to debt servicing and shareholders, protecting businesses relying on health waters, bringing excellence and modernisation instead of sweating the assets and a ‘what will the customer tolerate’ approach to the water industry, you may know of more – all of this will be affected by what happens this week.”
Latest update
TW won the court’s approval for an emergency debt package of up to £3bn on 18th February. This will keep it afloat for the short term but does not solve its financial problems. However, the company has also sought permission to increase customers’ bills by more than the 35%, allowed by OFWAT.
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With thanks to Ash Smith of Windrush Against Sewage Pollution.
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