River Action, a river charity, is taking legal action against Environment Secretary Steve Reed, accusing him of unlawfully failing to publish and implement a policy on the temporary nationalisation of failing water companies.
The charity argues that Thames Water has repeatedly and seriously breached its duties and licence conditions, making it the clearest case for special administration. Special administration is a temporary insolvency process for essential services like water, designed to ensure continuity while stabilising the company.
Reed has said the government is preparing for Thames Water to enter special administration, indicating he will reject creditor pleas for leniency. Thames Water's largest creditors have offered £5.3bn in new funding to restructure the utility.
Emma Dearnaley, River Action's head of legal, said: 'Enough is enough. Why hasn’t the secretary of state used special administration to fix the water sector, starting with Thames Water? The government has the power but won’t use it, or even explain when it might trigger this process.'
River Action has lodged a judicial review application, claiming the government breached core public law duties by not publishing its policy on special administration and failing to develop one, violating habitats regulations and environmental laws.
Under the Water Industry Act 1991, special administration can be triggered if a company's failures are serious enough to make it inappropriate to hold its licence. River Action says Thames Water meets this threshold, with serious pollution incidents up 60% last year. Thames Water alone was responsible for 33 of 75 serious incidents in 2024.
