A Critical Review of UK Special Administrations and Their Alternatives for Struggling Providers of Public Functions

Our latest article, published in the second issue of the Journal of Business Law for 2026 (pp. 176–203), offers a comprehensive and rigorous assessment of the United Kingdom’s non-financial Special Administration Regimes (SARs) and their suitability for dealing with the insolvency of providers of essential public functions. By situating the analysis within the broader economic and regulatory context of privatisation and marketisation, we demonstrate that the existing patchwork of SARs (now twenty‑one in number) has become fragmented, outdated, inconsistently applied and increasingly ill‑suited to modern policy challenges. 

Since the progressive privatisation and outsourcing of public services from the late twentieth century, the UK has increasingly relied on private entities to deliver essential functions, exposing these services to insolvency risks that traditional procedures cannot adequately manage. In response, sector-specific SARs have emerged to safeguard continuity where failure would undermine public welfare. They provide public funding for the costs of the procedure, modified public interest objectives, and an indemnity for the administrator. The funding is recoverable in priority, and SARs do not represent a bailout.

SARs respond to the insolvency risks of a class of entities that, although privately owned and subject to market forces, perform essential functions on which communities, businesses and the state rely. Their failure, therefore, generates risks that conventional insolvency law, with its focus on creditor returns, is ill‑equipped to manage. We highlight that many of these entities operate in natural or situational monopoly conditions, meaning that once they falter, there is often no immediate market alternative. Insolvency thus threatens public welfare, safety, and continuity of critical infrastructure in a way that goes far beyond the objectives of the Insolvency Act 1986. We draw on examples ranging from transport and postal services to water, energy, social housing, technology and even further education. 

Against this backdrop, we adopt a doctrinal and comparative methodological approach, examining statutory frameworks, case law and sectoral practice. Through this structured evaluation, we show that traditional insolvency procedures (administration, compulsory liquidation and restructuring plans) are structurally unable to accommodate public‑interest considerations. The analysis of administration highlights the tension between an administrator’s statutory duties to creditors and the need to maintain essential services. The administration of Monarch Airlines and Harland & Wolff are used to demonstrate that continuity of public functions was secured only through external mechanisms (the CAA’s repatriation programme or existing regulatory safeguards), rather than the insolvency process itself. In energy supplier insolvencies, in most cases, the Supplier of Last Resort mechanism, not administration, ensured continuity of supply, with the administrator merely winding down the failed entity. 

Compulsory liquidation is shown to have become the de facto tool for major public‑function insolvencies, not because it is substantively adequate, but because administrators are unwilling to assume the risks associated with uncertain safety and environmental liabilities. We draw on existing literature and discuss the high‑profile compulsory liquidations of entities including British Steel, Carillion, Baglan Operations, Thomas Cook and Speciality Steels, all of which relied on the Official Receiver and special managers. We observe that while liquidation offers useful powers (such as the disclaimer of onerous property), its statutory objectives focus on asset realisation rather than service continuity, leaving a fundamental mismatch between legal design and public‑interest needs. 

We also scrutinise restructuring plans under Companies Act 2006, Pt 26A. The Thames Water decisions are examined in depth. Although the court acknowledged the public‑policy stakes in avoiding a special administration, it held that public interest considerations were not relevant to the exercise of the cross‑class cramdown. Those decisions remained for the Secretary of State and the regulator. This demonstrates that, even in cases with clear public‑welfare implications, the restructuring plan remains structurally creditor‑centred. 

Having shown why the traditional toolkit fails, we turn to SARs. Through a systematic survey, we expose deep fragmentation: SARs differ in scope, objectives, triggers, funding arrangements and the extent of administrator indemnities; many contain outdated provisions; and some have never been used. Although cases such as Railtrack, Metronet and Bulb illustrate the utility of SARs in safeguarding continuity of essential services, we argue that the sector‑by‑sector development of SARs has resulted in redundancies and gaps. Crucially, entire categories of essential providers (including digital infrastructure, universities and certain types of charities) are excluded without principled justification. 

The article’s central normative contribution is its call for a unified, non‑financial SAR. Such a regime would replace the proliferation of sector‑specific SARs with a coherent statutory framework under a revised Schedule B1 of the Insolvency Act 1986. The unified SAR would incorporate a clear public‑welfare threshold, a modular toolkit of outcomes, automatic access to government funding and indemnities, and structured coordination with sectoral regulators and the Network and Information Security Regulations. We explain that this would provide clarity, predictability and consistency, while avoiding crisis‑driven legislative amendments and ensuring that modern risks (particularly digital and cyber‑resilience risks) are captured. 

We conclude that SARs are indispensable, but only when the failure of a provider poses significant public‑welfare risks; otherwise, the ordinary insolvency toolkit should prevail. By diagnosing the deficiencies of the current approach and setting out a workable blueprint for reform, we believe we have offered an important and timely contribution to contemporary insolvency scholarship and public‑policy design.

The authors’ paper can be found here. 

Rebecca Parry is a Professor of Law at Nottingham Trent University. 

Eugenio Vaccari is an Associate Professor at Royal Holloway, University of London. 

Sanjay Chapagain is an LLM graduate from Nottingham Law School, Nottingham Trent University.