Letter to New Secretary of State
The Rt Hon Dame Angela Eagle
Secretary of State for Environment, Food and Rural Affairs
Seacole Building, 2 Marsham Street, London SW1P 4DF
Monday 20th July 2026
Dear Secretary of State,
We would like to congratulate you on your appointment as Secretary of State at a time of unprecedented public outrage at the lack of resilience of our water system and the failure of our water sector.
In 2025 we published our independent People's Commission report into the water sector[1], drawing on international and national evidence, and giving the public a voice on the solutions. Rather than just rehearse the ongoing problems, we took a step further than the government-appointed Cunliffe commission, to both look at the root causes of pollution and our national lack of preparedness for the demands on water. We found that the main cause of underinvestment, short term solutions, and lack of patient investors to be the model of privatisation and the commodification of water [2]. The recommendations in the report set out the need for public ownership – the model used by 90% of other countries and supported by 82% of the public - and the route to get there.
We would be delighted to meet with you explain the robust evidence behind our inquiry and recommendations, and to support your plans for the water sector.
The Clean Water Bill is the opportunity to establish a clear direction for the future of water, but it falls short, perpetuating the current embedded failing system of water management, whilst missing the opportunity to conserve and protect water now and in the future.
As Secretary of State, you have an opportunity to reset the current position and establish a clear direction for the future of water management in England and Wales. We ask you to consider the following actions, all of which are supported by the evidence we have gathered.
1. Thames Water should be placed into a Special Administration Regime (SAR) under an administrator who will transfer it to public ownership.
We are aware that HM Treasury has repeated the claim of Thames Water consultants, Teneo, that SAR would cost the government up to £4 billion[3]. This claim was rejected by both the High Court and the Court of Appeal[4]. Even Thames Water's own chairman, Sir Adrian Montague, confirmed under parliamentary questioning that the net cost to the state would "likely be zero."
The application of the SAR would impose a moratorium on debt interest payments. This would then free up around 37% of Thames Water bills (currently servicing debt), which could also be directed to infrastructure repairs. This is likely to be welcomed by bill payers. The financial case for SAR is substantially stronger than Treasury briefings have suggested, and we attach a briefing on the actual costs of SAR.
We believe SAR would provide the stability needed to protect essential public assets, safeguard customers and the environment, and provide government with the time and space to determine the most appropriate long-term ownership model.
SAR creates the opportunity for transformative change — it does not guarantee it. The administrator, once appointed, is formally an officer of the court and operationally independent. But the government can choose the person who will carry out the government’s priorities. Under the current framework, the administrator can sell to any buyer who meets the licence conditions Ofwat sets on exit — including a private buyer indistinguishable from the current creditor group. A SAR conducted without robust exit conditions could deliver a cosmetic change of ownership while leaving the underlying structural problems intact.
We therefore urge that the SAR application to the High Court specifies that the administrator will transfer the assets of Thames Water, including worker pension liabilities and employment contracts, to a publicly owned company, and that other creditors receive no compensation. This reflects the damage they have left behind, estimated to be £23 billion. This can be done through a public support conditionality.
Please see the attached summary of the financial benefits of SAR.
2. The government needs to commission an independent study into alternative ownership models for the water sector.
Public ownership of water is normal in the rest of the world and there are numerous excellent examples from which we can learn, we are spoilt for choice. This was a key recommendation from the People's Commission. An independent study could draw on expertise from the UK and internationally, examining jurisdictions that have successfully adopted different approaches to ownership and governance. The objective should not be to replicate another country's model, but to identify best practice and develop a modern governance framework delivering accountability, long-term investment, resilience and environmental protection. We note that this study need not delay the SAR process — it can and should run in parallel with the infrastructure condition assessment, and in turn would be informed by that assessment. We note that Defra has not as yet investigated the costs of public versus private ownership to the public[5].
3. Regulators need to be instructed to enforce existing statutory duties fully and transparently.
The NAO concluded in April 2025 that regulators do not have a shared understanding of the condition of water and wastewater assets. The government's Water Commission reached the same conclusion. Regulators should be instructed to ensure water companies comply fully with their statutory duties and licence conditions. Existing legal obligations must be enforced consistently and transparently, and companies should be required to recognise long-term infrastructure repair liabilities within their financial reporting so that their financial resilience can be assessed accurately.
4. There needs to be a long-term national strategy for water.
Such a strategy should address environmental protection, water security, infrastructure resilience, climate change, population growth and emerging contaminants including PFAS. We recommend establishing an independent scientific advisory body, similar in principle to SAGE in COVID, to provide ministers with expert, evidence-based advice independent of political and commercial interests.
The attached briefing prepared by the People's Commission for Water, sets out one possible pathway towards public ownership and wider reform of the sector.
We would welcome the opportunity to discuss these recommendations with you and your officials. We are confident in the robustness of the evidence underpinning our recommendations.
Yours sincerely,
Prof Becky Malby BEM, Dr Kate Bayliss, Prof Frances Cleaver, Prof Ewan McGaughey
The People's Commission on the Water Sector
Attached
1. Briefing provided to Miatta Fahnbullah on how to move water to public ownership
[1] Available at https://www.thepeoplescommissiononthewatersector.co.uk/reports
[2] Note this is not a lock and stock transfer to mutual ownership which replicates water as a commodity not a public good.
[3] See attached paper on the costs of SAR
[4] Sir Adrian Montague gave oral evidence to the Environment, Food and Rural Affairs Select Committee on 15 July 2025. According to the Octus Intelligence professional briefing ‘Thames Water and the Shadow of Special Administration’ (18 July 2025), Montague told MPs that a SAR “could cost more than the £3.5 billion submitted in evidence as part of the first restructuring plan depending on how long the SAR process took to complete, but that the overall cost to the state would likely be zero.” The transcript of the 15 July session had not been published at committees.parliament.uk at the time of writing; the hearing page is at committees.parliament.uk
[5] https://www.thepeoplescommissiononthewatersector.co.uk/blog/blog-post-title-one-8ma2e-sdats-c4epz