Beyond nationalisation: A partnership model for UK water?

UK water should pursue a partnership model that combines private capital with stronger public influence rather than choosing between privatisation and full nationalisation.

• The government plans to remove current limits on public ownership of shares, while acknowledging that the sector still relies on private investment and that reforms must comply with fiscal rules.
• In 2025/2026, capital investment rose substantially and exceeded EBITDA at many water companies, while Ofwat’s Major Water Infrastructure Programme seeks to attract further private funding without placing the entire burden on taxpayers.
• Public influence could be increased through mutual ownership, public-service objectives, regional planning authorities, stronger mayoral accountability or minority state stakes, although mutual structures may have less access to equity capital.
• Thames Water could become the first practical test: creditors indicated in July that they could support enhanced public influence in a restructuring, including a possible ministerial golden share alongside an equity injection negotiated with Ofwat.
• L&G’s UK water stewardship campaign, launched in 2026, focuses on operational performance, governance, accountability, climate and nature, financial resilience, and delivery of the AMP8 investment programme for 2025–2030; the firm has engaged Ofwat, Defra, Thames Water, United Utilities, Severn Trent and Pennon Group.

Takeaway: A successful Thames Water restructuring could provide a blueprint for attracting long-term private capital while improving public oversight, operational delivery and customer outcomes, but the model depends on political will, regulatory clarity and credible accountability.