Ofwat continues to use its stronger powers to penalise errant water companies, but the offences keep on happening. This provides business water customers with another reason to consider switching water supplier.
Since taking office in 2024, the government has introduced new legislation aimed at improving the performance of water suppliers. This has included strengthening the hand of the regulator Ofwat to punish failings.
This has certainly been used. For instance, the new power to ban bonuses for water company bosses if their firms are performing badly, such as failures to prevent sewage pollution in rivers, saw £4 million clawed back in the first year the power was in effect.
It might be thought that such measures, as well as multi-million-pound enforcement actions against various companies, would soon focus minds and ensure that firms improved their act. This was certainly the intention.
However, so far it appears that at least some companies that already have poor track records in recent years continue to fail their customers and the wider public, from business water users to domestic households.
How Has South East Water Failed Customers Repeatedly?
South East Water is a prime case in point. Its travails in recent times have included:
- A 2023 investigation by Ofwat into its water supply resilience, prompted by the company having the worst water supply interruption in England in 2022-23.
- Supply failings between 2020 and 2023 prompted Ofwat to hit the company with a £22 million fine in March this year.
- A further investigation was launched in January this year following repeated water outages affecting businesses and homes in Kent and Sussex last autumn and winter.
- Following a third investigation, Ofwat has now proposed a £30.5 million enforcement package for the company in the wake of repeated supply failures.
In the latest instance, the failures included major supply interruptions across Tunbridge Wells, other parts of Kent and Sussex, during Storm Goretti. 70,000 homes and many businesses were left with severe supply interruptions.
The most damning part of the Ofwat press release said: “Ofwat found that the company had failed to plan sufficiently, maintain key infrastructure or learn from previous incidents – leaving the system unable to cope during extreme weather or periods of high demand.”
Furthermore, after these three investigations, the credit rating agency Moody’s downgraded South East Water. This means it is now in breach of licence condition P26, which requires that companies should have two investment grade credit ratings.
The move by Moody’s occurred late in May and, like the Ofwat investigations, was focused on concerns about supply resilience.
What Has South East Water Been Ordered To Do To Improve Its Service?
In response to both the three investigations and the Moody’s downgrade, the company has now agreed to several steps:
- £13 million will be ringfenced to fund a remediation plan.
- £5 million will be set aside for the provision of on-site storage facilities for non-household customers, something that would help business water users.
- £5 million to provide water metering to non-household premises by 2030.
- A performance improvement plan will be produced in an attempt to restore the company’s credit rating.
Executive director for delivery at Ofwat, Helen Campbell, said: “These failures have caused real disruption and hardship for residents and businesses across many years, and supply interruptions of this scale have happened far too often.”
It may be hoped that the new measures will improve matters. But the fact that it has taken multiple investigations and repeated action by Ofwat even to get matters to their present state of affairs raises an important question for business customers.
If companies like South East Water – and others too – have been guilty of multiple offences and have not yet shown signs of improvement, what can you do about it? Do you simply have to cross your fingers and hope they finally get it right?
Why Should Your Firm Consider Switching Water Supplier?
Fortunately, this is where businesses have an advantage over domestic users in being able to switch suppliers. If yours is not up to scratch, you don’t have to put up with it.
This is true whatever your motivation for changing, be it the quality of customer service, frequency of disruption, the impact of pollution incidents, price, or any other concern.
Moreover, our switching service makes it easy to compare deals with different possible suppliers to find the best one for you, as well as to complete the changeover.
Whoever your retailer is, if they are letting you down, you can make full use of your right to find a better and more reliable provider at a fair price.
