Water (Special Measures) Act 2025

15 Modification by Welsh Ministers of water company’s appointment conditions etc to recover losses

After section 16B of the Water Industry Act 1991 insert—

“16C Modification by the Welsh Ministers: special administration orders

(1) This section applies in relation to a company appointed under this Chapter whose area is wholly or mainly in Wales.

(2) The Welsh Ministers may make modifications of the conditions of the company’s appointment so that they include conditions requiring or enabling the company—

(a) to modify the charges it imposes on any persons to whom it provides services in the course of carrying out its functions so as to raise such amounts as may be determined by or under the conditions, and

(b) to pay the amounts so raised to the Welsh Ministers for the purpose of making good any SAO loss.

(3) In subsection (2) “SAO loss” means so much of any loss or expense—

(a) which is incurred by the Welsh Ministers (whether before or after the coming into force of this section) in the giving of relevant financial assistance, and

(b) which the Welsh Ministers do not expect (apart from the exercise of the powers under this section) to recover.

(4) In subsection (3) “relevant financial assistance” means financial assistance of any description given under section 153 in connection with a special administration order made in respect of—

(a) the company whose appointment is modified, or

(b) any other company which holds or held an appointment under this Chapter and whose area is or was wholly or mainly in Wales.

(5) A condition of appointment included under subsection (2)(b) may require amounts to be held on trust pending their payment to the Welsh Ministers.

(6) The reference in subsection (3)(a) to loss or expense incurred in the giving of relevant financial assistance includes loss or expense incurred as a result of, or otherwise in connection with, the giving of the assistance.

(7) The power of the Welsh Ministers to modify under this section the conditions of a company’s appointment includes power to make such incidental or consequential modifications of the conditions of any appointments under this Chapter as the Welsh Ministers consider necessary or expedient.

16D Modifications under section 16C: procedural requirements

(1) Before making any modifications under section 16C, the Welsh Ministers must give notice—

(a) stating that they propose to make the modifications,

(b) setting out the proposed modifications and their effect,

(c) stating the reasons why they propose to make the modifications, and

(d) specifying the time within which representations with respect to the proposed modifications may be made.

(2) That time must not be less than 42 days from the date of publication of the notice.

(3) A notice under subsection (1) must be given—

(a) by publishing the notice in a way the Welsh Ministers consider appropriate for bringing it to the attention of persons likely to be affected by the modifications, and

(b) by sending a copy of it to—

(i) each company holding an appointment under this Chapter the conditions of which the Welsh Ministers propose to modify,

(ii) any other company holding an appointment under this Chapter, any water supply licensee and any sewerage licensee, whose interests the Welsh Ministers consider are likely to be materially affected by the modifications,

(iii) the Authority,

(iv) any person whose functions are or include representing those within sub-paragraph (i) or (ii) in respect of interests of theirs that the Welsh Ministers consider are likely to be materially affected by the modifications, and

(v) the Council.

(4) The Welsh Ministers must consider any representations which are duly made.

(5) If after complying with subsections (1) to (4) the Welsh Ministers decide to proceed with making the modifications, the Welsh Ministers must—

(a) publish the decision and the modifications in a way they consider appropriate for bringing them to the attention of persons likely to be affected by the modifications,

(b) state the effect of the modifications,

(c) state how the Welsh Ministers have taken account of any representations duly made, and

(d) state the reason for any differences between the modifications and those set out in the notice under subsection (1).

(6) Each modification has effect from the date specified by the Welsh Ministers in relation to that modification.

(7) The date specified may not be less than 56 days from publication of the decision to make the modification, unless—

(a) the Welsh Ministers consider it necessary or expedient for the modification to have effect before the 56 days expire, and

(b) the consultation condition is satisfied.

(8) The consultation condition is that the notice under subsection (1) relating to the modification stated—

(a) the date from which the Welsh Ministers proposed that the modification should have effect,

(b) the Welsh Ministers’ reasons for proposing that the modification should have effect from a date less than 56 days from the decision to modify, and

(c) why, in the Welsh Ministers’ view, that would not have a material adverse effect on any person holding an appointment under this Chapter.”