Written question asked by Tim Farron (Liberal Democrat) on Monday, 7 September 2026, in the House of Commons. It was due for an answer on Wednesday, 9 September 2026. It was answered by Emma Hardy (Labour) on Monday, 14 September 2026 on behalf of the Department for Environment, Food and Rural Affairs.

Water Companies: Standards

Question: To ask the Secretary of State for Environment, Food and Rural Affairs, what level of debt-to-equity ratio and other financial resilience thresholds her Department considers indicative of a water company's failure to manage its affairs.

Answer: Ofwat issues clear guidance on efficient debt-to-equity ratios and on higher debt-to-equity ratios which are inconsistent with good financial resilience. It considers that 55% is an efficient ratio and that gearing above 70% may present a risk to long-term financial resilience. Some water companies have significantly higher debt than these thresholds. In the Water White Paper, the Government committed to consider how the regulator can work with companies and investors to ensure companies do not accumulate unmanageable levels of debt.

Secondary information

Type: Written question
Reference: 27413
Session: 2026-27
Related items: Water Companies: Finance
Tuesday, 15 September 2026
Written questions
House of Commons; Water Companies: Finance
Tuesday, 15 September 2026
Written questions
House of Commons; Water Companies: Finance
Tuesday, 15 September 2026
Written questions
House of Commons
Subjects: Debts Finance Standards Water companies
Link: View this Written question on www.parliament.uk