South East Water has been fined £22.5m by Ofwat for repeated supply failures in Kent and Sussex between 2020 and 2023 that affected more than 280,000 people.
While the root cause of the water shortages was extreme weather, the water regulator for England and Wales found that they were “in part attributable to and/or exacerbated by failures by South East Water itself to develop and maintain an efficient water supply system”.
This has affected 286,645 customers since 2020, with some customers being affected repeatedly, Ofwat said in its enforcement order proposal.
In January, Ofwat began a separate investigation into a series of outages before Christmas that left tens of thousands of residents in Kent and Sussex without water for up to a week, many of them in Tunbridge Wells. This prompted the environment secretary, Emma Reynolds, to call for the regulator to review the company’s operating licence.
Chris Walters, Ofwat’s interim chief executive, told BBC Radio 4’s Today programme: “The investigation reveals that South East Water did not take sufficient steps to plan, to learn from previous events. For example, the big freeze event we had in 2018.
“We all remember the “beast from the east”, and it didn’t proactively maintain its network. All the things it needs to do to prevent a lack of supply resilience, so tankering and storage tanks and storage reservoirs.”
Walters said the fine would be paid by the company and “won’t show up on customers’ bills”.
A spokesperson for South East Water said: “We recently filed for judicial review of an Ofwat draft decision and sought an injunction. Following a hearing, the court did not grant the interim injunction. We respect the court’s decision on this.
“We are now considering Ofwat’s draft decision and will respond via the appropriate channels, ahead of its final decision.”
Asked why the process took three years, Walters said that investigations took time, saying supply interruptions for customers were “a totemic issue” and it was important to get things right.
He added that South East Water “needs to step up and take more ownership of the problem”.
Prominent water campaigner Feargal Sharkey said: “Let’s be clear about this, as has been proven time and time again, fining these companies is nothing but a charade.
“These fines rarely if ever get paid, shareholders rarely if ever take money out of their pockets to pay them and invariably water companies negotiate some sort of deal so that ultimately it doesn’t cost them a penny.
“Ofwat needs to start revoking operating licences and government needs to order them to start that process today.”
Jonathan Hawker, chair of local community group Dry Wells Action: “This £22m fine, yet again, highlights the shortcomings of the organisations that are supposed to be representing consumers’ interests.
“Given that South East Water has £1.3bn in debt on a turnover of less than £300m, from which it made a loss of almost £20m last year, it should be obvious to Ofwat that consumers will end up paying this fine either through increases in water bills or through the additional cost of debt at the company.
“We are extremely disappointed that there is no action to impose leadership on this company, or to force upon it a remedial action plan for urgent improvements and expansion of the infrastructure serving Tunbridge Wells.”
The latest penalty comes a day after another supplier, South West Water, admitted supplying water unfit for human consumption after a parasite outbreak in Devon made almost 150 people sick.
Last May, Thames Water, Britain’s biggest water company, received a record £104m fine from Ofwat over environmental breaches involving sewage spills, after failing to operate and manage its treatment works and wastewater networks effectively.
