According to their 2022/2023 financial report, Thames Water has a total of £22.645 billion in assets. The majority of this, approximately £18 billion, is held in “property plant and equipment": the infrastructure, pipes, sewage treatment works, and land on which it is located. They do not, however, own the water, but rather hold a government licence to abstract it. They have 1.8 billion in cash and cash equivalents. A request for information in 2016 showed that Thames Water owns 16,000 acres of land in the south of England.

In 2018, Corporate Watch did an analysis of the shareholder structure of the UK’s water companies. They found that CK Hutchison, a Hong-Kong based multinational conglomerate, owned 7% of the UK’s water infrastructure, the largest proportion held by a single shareholder. Thames Water’s largest shareholder is the Ontario Municipal Employees Retirement System, a Canadian Pension fund, who own 32% of the company. The Universities Superannuation Scheme (USS), which is responsible for overseeing the retirement funds of employees in the UK’s higher education sector, is the second largest shareholder, at 20%. Sovereign wealth funds connected to the governments of Abu Dhabi and China also own portions of Thames Water (10% and 9%, respectively).

Ofwat has a gearing measurement for all of the UK's water companies. Gearing is a ratio that refers to a company’s net debt divided by its regulatory capital value (RCV). Ofwat recommends that water companies have a 60% gearing ratio meaning that debt should be no more than 60% of their capital base. Thames Water has a gearing of 80% – the highest of all the UK water companies.

In the 2022/2023 financial year, Thames Water paid £45 million in dividends to shareholders which comes to around £3 per customer. According to their financial projections, they plan on increasing dividend payments year by year until the 2029/2030 financial year when they expect to pay around £230 million. Between 1990 and 2022, Thames Water paid a total of £7.2 billion in dividends. In its Annual Performance Report, Thames Water has repeatedly sought to obscure the scale of its dividend payments by funnelling them through a subsidiary, Thames Water Utilities Holdings Limited.

From 2006 to 2017, Thames Water was owned by a consortium led by the Australian global financial services group, Macquarie, also known as the Vampire Kangaroo. Under Macquarie’s ownership, Thames Water’s debt increased from £3.4 billion to £10.8 billion.

From 2001 to 2004, prior to Macquarie's ownership, Thames Water distributed, on average, 60% of its profits as dividends. After Macquarie’s takeover, Thames Water began distributing more money to shareholders than it was making in profits, eroding the company’s capital base in a strategy known as “asset stripping”. In the 2006/2007 financial year, £656 million was distributed to shareholders despite Thames Water only making £241 million in profits. Macquarie sold its final stake in Thames Water in 2017 for £1.35 billion. Over its 11 years of ownership, Macquarie and its co-investors paid out £2.8 billion to shareholders.

Macquarie's influence in UK industries continues to swell. In 2021, Macquarie bought a 62.2% stake in Southern Water and a further 20% stake in British Gas Transmission in August 2023, bringing its total ownership to 80%. Cathryn Ross, former CEO of Ofwat and Thames Water, is a board member of British Gas Transmission.

Currently pension funds, including the Ontario Municipal Employees Retirement System (Omers) and the Universities Superannuation Scheme (USS), the largest pension fund in Britain, collectively hold just over 50% ownership of Thames Water. Macquarie and Thames Water's fiscal irresponsibility has arguably led to a precarious situation regarding the pensions of these funds' respective members. Despite this, USS has stated that "with an appropriate regulatory environment" there is a "strong alignment" between the long-term goal of restoring critical infrastructure in the UK and providing pensions to its members. Thames Water has indicated it would require an additional £2.5 billion equity injection between 2025-2030.

On 4 July 2023, Thames Water was issued a fine of £3.3 million relating to four incidents of illegal discharging of raw sewage from the Crawley Water treatment works into the Gatwick Stream and River Mole. This latest penalty brings Thames Water’s total fines for environmental breaches to £35.7 million since 2017. These penalties amount to 0.03% of Thames Water’s total revenue in the same period.

When the Water Act of 1989 privatised water and wastewater services, it gave birth to two congenitally intertwined bodies: private Regional Water Authorities—Thames Water being one of ten—and three national regulatory bodies responsible for monitoring the new water companies. The Drinking Water Inspectorate (DWI) inspects the quality of potable water; the National Rivers Authority, now the Environment Agency (EA) and Natural Resources Wales, monitors the impact of water companies’ operations on the natural environment; and the Water Services Regulation Authority (Ofwat) manages the prices water companies charge. The declining health of the UK’s rivers speaks to the ineffectiveness of Ofwat and the EA and, at worst, to their complicity with corporate interest.

Why do the EA and Ofwat maintain such blind faith in the water companies despite the glaring failure of existing processes? Significant crossover between senior management at the water companies and the agencies designed to regulate them has created a set of entangled and tense relations between the two parties. Interim CEO of Thames Water Cathryn Ross was appointed in July 2023, rising from the role of Director of Strategy and Regulatory Affairs which she assumed in 2021. Prior to her turn to private industry, Ross spent 20 years working for bodies intended to regulate the same industry. She led Ofwat as its CEO from 2013 to 2017, rising from her position as Director of Markets and Economics which she held between 2008 to 2011. As CEO of Ofwat, Ross would have worked with the organisation’s Chairman Jonson Cox, who stayed from 2012 to 2022. His qualifications include Managing Director of Yorkshire Water from 1996 to 2000, and Group CEO and Chairman of Anglian Water from 2004 to 2010. Cox himself described his move to Ofwat as one of a “poacher turned gamekeeper”. Two-thirds of England’s largest water companies are run by senior executives previously employed by Ofwat and the EA despite legitimate conflicts of interest.

In 2010, following changes to the regulations attached to water and sewerage licences, companies were required to self-report the quality and quantity of their effluent. The companies themselves became entirely responsible for collecting, analysing and reporting their discharge to the EA, including any breaches to the conditions of dry spillage. The EA in turn is responsible only for “receiving and logging information about potential incidents” and “assessing the information to determine whether an incident has occurred and how or if the Environment Agency should respond”. While the EA claims to conduct regular surprise checks on these companies and hold them accountable for perceived misinformation, their enforcement comes too little, too late, as the environment pays upfront for lax regulation. The EA lays out the requirements for self-reporting, including which polluting events should be reported as pollution incidents by water companies. In the policy document Operational Instruction 16 02 , the EA states: “The operation of intermittent discharges in dry weather is of particular concern. Assessment can be difficult due to the nature of typical intermittent discharges permits but generally these assets are only likely to be discharging within the terms of their permit in wet weather.” This statement falsely suggests that water companies do not break the rules, since their compliance—or lack thereof—has a direct impact on their performance, measured and managed by Ofwat. As the financial regulator, Ofwat determines how much the companies are allowed to charge customers for their services. As profit-generating entities, companies are plainly disincentivised from reporting regulatory breaches, such as sewage spills.

Richard Auld MacDonald, an employee of the Environment Agency from 2013 to 2022, was appointed Deputy Chair of the regulatory body in 2016. In a declaration of interests form obtained by WASP, he disclosed his position as a non-executive director at two agricultural processing companies. One of these was Dairy Crest, which was fined £1.5 million in 2022 for a series of pollution offences committed over the previous five years Macdonald was also director at Moy Park, a poultry producer. The impact of industrial chicken farming on Britain’s waterways has been the subject of increased scrutiny in recent years. The surplus phosphate produced by chicken waste runs off of farmland and pollutes nearby waterways. A study published in May 2022 by the University of Lancashire reported that phosphate pollution in the River Wye has directly resulted from nearby industrial chicken farming and water quality will not improve unless nearby agricultural activity is reduced. The high court recently granted the environmental charity River Action consent to file a case against the Environment Agency. Charles Watson, chairman and founder of the environmental non-profit River Action, which has filed suit against the Environmental Agency over pollution in the Wye, argued that "a prime cause for the recent ecological collapse of the River Wye is the EA’s decision to slavishly follow DEFRA’s guidance to not enforce critical provisions of the 2018 Farming Rules for Water." When the Environmental Agency Deputy Chair simultaneously holds senior positions in companies he or she is meant to monitor, the conflict of interest, unlike phosphate-tainted waiter, becomes crystal-clear.

It is incredibly difficult to remove a water company’s licence. In 2002, the government granted water companies a rolling licence which cannot not be removed without 25 years’ advance notice. Motivated by the assumption that only secure long-term licences would secure private investment, the agreement guaranteed that companies could neglect their public obligations without fear of serious reprisal. The rules around licensing are so complicated that gross violations of a licence are nearly impossible. The Environmental Agency (EA) and Ofwat are left with fines as their only tool in sanctioning water companies.

Thames Water could be placed into a special administration regime (SAR). This process is used for private companies responsible for providing a statutory or public service (such as energy, water or railways) if they are unable to finance their functions or fulfil their legal obligations. Under SARs, government ministers become heavily involved in how the company is run, forcing the company to restructure, pay down debts and reduce payouts to shareholders. SARs operate as a fallback, preventing crucial public services from being interrupted until a new buyer can be found (as in the case of Bulb in 2022) or the company becomes fully nationalised (as occurred for Railtrack in 2002). Special administration for Thames Water could be initiated by the Secretary of State or Ofwat (with the consent of the Secretary of State) through a petition made to the High Court.

In a nationalisation process, private debt would be replaced by public debts and the government would take over bill collection. To what extent would infrastructure improvement and other maintenance work be done “in-house,” and to what extent would it be outsourced to specialised private subcontractors? Would public ownership be administered by a governmental agency such as the Environmental Agency (EA) or through local governments? How could a nationalised water industry, linked to Treasury spending rounds and dependent on taxation for funding, make long-term investments in infrastructure?

Despite these considerations, the threat of nationalisation still lingers in the minds of water company bosses. Liv Ruth Garfield CBE, CEO of Severn Trent Water, invited other bosses, in a "confidential" email leaked in July 2023, to an unofficial roundtable to discuss potential ways to stave off nationalisation if a Labour government becomes incumbent. Garfield is the highest-paid water boss in England, receiving £3.2 million total pay this year, and as of 31 October 2023, owns 381,089 shares in Severn Trent PLC, priced at £26.56 each. Such fears, however, are unlikely to come to fruition under Keir Starmer’s Labour party, given Starmer’s stated opposition to renationalisation.

Thames Water in July 2023 secured an additional £750 million in capital funding, enough to temporarily prove financial solvency and fund infrastructural invest and "stave off nationalisation". However, the plan holds only "in the satisfaction of certain conditions, including the preparation of a business plan that underpins a more focused turnaround." In this business plan, the average water bill will increase by £175 per customer per year by 2030, before inflation. Thames Water has justified these rate hikes as funding a £4.7 billion investment in infrastructure improvements spread over the five-year period, but they are also funding a 411% increase in dividends and £1.2 billion increase in annual profit margins by 2030 – conditions necessary to attract the capital injection in the first place. Thus, Thames Water's temporary stabilisation – and continued private ownership – is conditional on dramatic increases to the cost of living for its customers.