Water sector regulator Ofwat has issued a statement this evening commenting on Thames Water's financial resilience, saying the water company has "strong liquidity."

The statement comes after widespread media coverage raising concerns over Thames Water's current financial position, including a £14 billion debt burden.

The issue was also the subject of an urgent question in the House of Commons earlier today - following Prime Minister’s Questions, Labour MP Jim McMahon MP, Shadow Secretary of State for Environment, Food & Rural Affairs, asked the Secretary of State for Environment, Food and Rural Affairs if she would make a statement on the financial resilience of the water industry.

This morning Chancellor of the Exchequer Jeremy Hunt chaired a roundtable with CEOs from the Competition and Market Authority (CMA), Financial Conduct Authority (FCA), Ofcom, Ofgem and Ofwat.

Jeremy Hunt made clear his expectation that regulators work at pace to guarantee markets are working properly.

A statement issued by HM Treasury after the meeting says that Ofwat has agreed to:

• Crack down on water companies not going far enough to support customers to pay their bills, access help and repay debts. This will include assessing water company compliance with Ofwat’s Paying Fair Guidelines, and where companies’ approaches are found to be insufficient, setting out clear actions for improvement in July.
• Next year, Ofwat will also set out clear and binding license conditions for every water company on how to treat their customers, including customers in vulnerable circumstances.
• Hold water companies to account over delivering existing social tariffs for those unable to pay water bills, as well as allowing consumers to apply for payment holidays and offering support to those on low-incomes.
• Ensure targeted support for vulnerable customers by improving data sharing, such as those struggling with bills (along with Ofgem).

In a statement issued by the water sector regulator this evening, an Ofwat spokesperson said:

"Over the last day or so, there has been a lot of commentary about financial resilience in the water sector with considerable focus on Thames Water in particular.

"We have been clear that Thames Water has significant issues to address – their environmental record and leakage performance, for example, are poor. Alongside the turnaround of their operational performance, they need to improve their financial resilience too.

"But that is all in the context of a company that has strong liquidity – it recently received an additional £500 million from shareholders and has £4.4bn of cash and committed funding.

"Overall, the sector is continuing to attract international capital and is especially attractive to long term investors such as pension funds. Indeed, there has been an additional equity injection of around £2bn since 2020, with companies acting to strengthen their financial position.

"Ofwat will continue to keep companies' financial resilience under close scrutiny and work with companies to ensure they take action to ensure that they have the financial backing to deliver for customers and the environment."