Regulators at Ofwat are slammed for being ‘asleep at the wheel’ amid the Thames Water crisis

Regulators at Ofwat have been slammed by politicians and campaigners amid growing fears over the ‘financial resilience’ of Thames Water.

Britain’s largest water supplier is scrambling for extra cash because of concerns around its £14billion debt pile, with the government considering a potential taxpayer bailout should it collapse.

This has sparked a barrage of criticism against Ofwat, which has been accused of being ‘asleep at the wheel’.

The regulator said yesterday morning that Thames Water, Britain’s biggest supplier with 15million customers, has ‘significant issues to address’ in several areas.

Many of these have come to the fore following the unexpected departure of Sarah Bentley as Thames Water’s chief executive this week.

Britain’s largest water supplier is scrambling for extra cash because of concerns around its £14billion debt pile, with the government considering a potential taxpayer bailout should it collapse

Darren Jones, Labour chairman of the Commons business committee, told the BBC, ‘taxpayers will be exposed to the debt and running costs of a very large company’ if Thames Water fails

Darren Jones, Labour chairman of the Commons business committee, has warned that ‘taxpayers will be exposed to the debt and running costs of a very large company’ if Thames Water fails.

He told the BBC that problems in the water industry – which was privatised in 1989 – are similar to the turmoil customers experienced in the energy sector last year when around 30 firms collapsed and the taxpayer was forced to step in.

‘We have to take on the cost of running these failed businesses, which is why it’s so galling for taxpayers when they see that regulators and ministers have failed to spot this problem before it all blew up,’ he said.

Ofwat flagged in December that it was concerned about the financial resilience of several debt-laden water companies, including Thames Water.

However, it said yesterday that the firm had been boosted by ‘an additional £500million from shareholders’, as well as ‘£4.4billion of cash and committed funding’.

Feargal Sharkey, rock star turned campaigner, said Ofwat’s lack of action has contributed to recent chaos. ‘As much as I may be furiously unhappy with the water companies, they were actually doing the job they were given, which was to make as much money as possible for shareholders,’ he said.

‘The question actually is what the hell were Ofwat doing for the last 30 years while all of this was going on? Because by god was the regulator asleep at the wheel? They were outflanked, outmanoeuvred and out-thought every single step of the way.’

Yesterday Yorkshire Water sought to shore up its finances by raising £500million from shareholders. Ofwat said it will ‘continue to keep companies’ financial resilience under scrutiny and work to ensure they take action to ensure the financial backing to deliver for customers.