Time to End the Sewage Scandal: Why Special Administration is the Solution
The time has come for bold action to fix our broken water industry. Today, we’re releasing a report co-authored by Save Windermere and Professor Ewan McGaughey, with a clear call to government supported by a coalition of campaign groups including Ilkley Clean River Group, SOS Whitstable, Windrush Against Sewage, Surfers Against Sewage, Beneath British Waters, Friends of Hurley, Henley Mermaids, River Action, and Save Our Swale. It is also backed by leading experts from King’s College London, UK Centre for Ecology & Hydrology, the University of Manchester, and the University of Greenwich.
As reported in The Guardian, we are calling on the government to use its existing powers to put failing water companies into Special Administration before they further exploit the bill-payer through increased bills and cause even more harm to our rivers, lakes, and communities. Labour's current proposals fail to address the core issue: privatisation has failed and this is the first step towards solving this crisis.
What is Special Administration?
Special Administration is a legal mechanism within the 1991 Water Industry Act that allows the government to take control of a failing water company. This can happen when a company is either on the brink of financial collapse (like Thames Water) or if it has breached its licence or statutory duties to a degree that makes it inappropriate for the company to continue operating. Once in Special Administration, an interim government-appointed administrator can remove the company’s directors, take control of its assets, remove all the companies debt, stop the abstraction of dividends and restructure its operations to safeguard and prioritise public health and environmental protection.
We believe every major water company in England meets the criteria for Special Administration due to extensive breaches of their statutory duties. Analysis from Professor Peter Hammond has exposed systemic illegal sewage discharges across the country, triggering investigations into every major water company. This is not just about one company’s failure—this is a breakdown of the entire privatised model.
A Broken System Needs a Real Fix, Not a Rebrand
Privatisation has led to the prioritisation of dividend return over environmental protection as billions in profits have been siphoned off by shareholders—while infrastructure has been left to crumble. Special Administration offers a firebreak by allowing the government to freeze dividend payments, cancel unmanageable debts, and focus resources on urgently needed repairs and upgrades. The law exists, but Labour is simply not enforcing it
But we have to be vigilant: Special Administration could be used as a tool to simply ‘tidy up’ these companies and hand them back to private investors, with Thames Water appearing to be the most vulnerable to this. If that happens, we’ll be stuck in a cycle of profiteering, pollution, and financial exploitation. We need a solution that genuinely protects the public and our environment for the long term and provides the opportunity for government to reassess the failed funding model.
This isn’t just a local issue—it’s a national crisis and the failure to protect Windermere is the epitome of this. We need a transformation that fundamentally shifts the water industry away from shareholder profits and towards environmental stewardship and public accountability.
If Special Administration is done right, it can be a turning point for the water industry. It would stop the haemorrhaging of money to shareholders and allow public funds to be used where they’re needed most—on cleaning up our waterways, restoring crumbling infrastructure, and ensuring that every community has access to clean water. Importantly for you as a consumer, this would immediately allow for increases in investment, without you having to pay again for a service that clearly hasn’t been provided. It would also buy the government time to explore new ownership models that put the public and the environment first, whether that’s public ownership, non-profit trusts, or community-led management.
It's clear that privatisation has failed, and Labour must reassess this instead of seeking further private investment, especially since shareholders have invested "less than nothing" of their own money since privatisation (they’ve actually withdrawn a real net total of £85.2bn).
The companies could have funded all of their operations and investments from customer bills, without taking on any debt whatsoever. The £47 billion of debt, and the interest we pay on it, is simply down to a systematic extraction of shareholder payouts far in excess of any available cash surplus.
We Need to Push for Real Change
The government must be pressured to consider all ownership options and give the public a voice in what happens next. This is our chance to demand a system that puts the environment and communities first, not profits. Special administration would allow the opportunity to do this. Here are our demands:
Trigger Special Administration for Failing Water Companies
The government should apply to the courts to place companies like Thames Water into Special Administration for both financial distress and severe breaches of licence and statutory duties.
Cancel Unmanageable Debt
Submit a plan to the court to write off existing debts to prevent these companies from passing the cost onto customers or public funds.
Ensure Transparency and a Time-Limited Process
The Special Administration process must be transparent, with clear timelines and a focus on delivering a long-term solution that prioritises public interest.
Keep All Ownership Options Open
No ownership model—whether public, community-based, or hybrid—should be ruled out until the full state of the company is known and public consultations have been held.
Protect Public Money for Public Good
Use public funds to secure clean rivers, lakes, and seas—not to bail out failing companies without genuine reform and accountability.
The Bottom Line
Special Administration is a chance to hit the reset button on a failing industry and build a water system that prioritises clean rivers, healthy communities, and sustainable management over shareholder profits. But we need to ensure it’s used correctly—if not, we’ll end up with the same problems all over again.
DOWNLOAD OUR BRIEFING DOCUMENT AND FAQs ON SPECIAL ADMINISTRATION BELOW.
