Andy Burnham is examining changes to the UK's insolvency laws in an effort to make it easier to bring struggling utilities, including Thames Water, under public control. The prime minister has pledged to reshape how Britain's essential services are run over the next decade, but officials say the existing "special administration regime" could act as a roadblock, since it is designed to protect creditors' returns rather than facilitate public ownership.

Officials identify two key obstacles: companies can only enter administration if insolvent or unable to provide basic service, which is not currently the case for Thames Water given continued creditor support, and administrators are legally obliged to maximise returns to creditors, making a cheap public takeover difficult. Thames Water is carrying around £20bn of debt, with many of its creditors US-based hedge funds likely to mount an aggressive legal challenge to any change. One proposed fix, backed by Labour backbenchers including Helena Dollimore and Andrew Pakes alongside the Good Growth Foundation, is to amend the special administration regime through the forthcoming water bill.