South East Water will pay £30.5m after a series of supply interruptions, customer failings and for breaching its licence, regulator Ofwat has confirmed. The redress package concludes three investigations into the supplier, according to The Guardian's reporting, and includes a previously proposed £22m fine for water supply failures between 2020 and 2023 that affected more than 286,000 people.

Regulator imposes £30.5m redress package

Ofwat launched a second investigation at the start of this year after further supply disruptions in Tunbridge Wells and across Kent and Sussex between November and January, which left up to 70,000 homes without water. A third investigation followed the downgrading of the company's credit rating by Moody's in May, which meant South East Water was in breach of its licence condition.

The regulator will also appoint an independent monitor to review the company's performance improvement plan and wider turnaround efforts. Helen Campbell, the executive director for delivery at Ofwat, said the 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." She described the package as a first step towards full accountability and towards improving overall performance, adding: "South East Water needs to make meaningful, lasting changes to ensure customers can rely on the service they receive."

Continued supply problems in Kent

Separately, thousands of homes and businesses in Kent are facing supply problems for a second day, including a "complete lack of water" in some cases. About 7,000 properties in the Tunbridge Wells area are facing low pressure, intermittent supply or no water at all, after an "instrument failure" at a nearby water treatment works.

On Sunday, the company said it was "on target" for supplies to return that evening "at the earliest" and apologised to those affected. Bottled water stations were open in the town for a second day, at the Tesco store on Pembury Road in Tunbridge Wells and at Tunbridge Wells Rugby Football Club on Balls Green. The company is also using tankers to increase drinking storage levels to support the affected areas and delivering bottled water to customers on its priority services register.

The company's incident manager, Steve Benton, said: "We are genuinely sorry to all customers currently experiencing low pressure, intermittent supply, or a complete lack of water today." He said levels in drinking water storage tanks were improving, but the company wanted to ensure that returns were a "stable, continuous flow" rather than a temporary fix.

Financial uncertainty and leadership changes

The supply disruption comes alongside a financial warning from the company's annual report, published on Friday. South East Water said there was "material uncertainty" over its survival, although it has sufficient funds to make it through to July 2027. However, shortly after that it will need new loan facilities in order to continue as a going concern, with discussions with lenders at an advanced stage and expected to conclude in summer 2026, but not yet legally committed.

The annual report also shows that losses widened to £33m, up from £14m a year earlier, even as revenues rose from £285m to £352m after Ofwat allowed the supplier to increase bills by 7%. The company has had one of the worst years since privatisation in 1989, with a series of outages that angered customers and politicians. Its chair, Bath Riise, and chief executive, David Hinton, were both forced to resign after months of criticism over the company's response to major supply failures in Kent and Sussex.

The £30.5m redress package negotiated by Ofwat puts further pressure on the company's finances, The Guardian reported.

Key claims

  • South East Water will pay £30.5m after a series of supply interruptions, customer failures and for breach of its licence.
  • The redress package concludes three investigations, including a previously proposed £22m fine for supply failures between 2020 and 2023 affecting more than 286,000 people.
  • An independent monitor will be appointed by Ofwat to review South East Water's performance improvement plan.
  • Thousands of homes and businesses in Kent are facing supply problems for a second day, including a complete lack of water in some cases.
  • The company is using tankers to increase drinking water storage levels and delivering bottled water to priority customers.
  • South East Water has warned there is "material uncertainty" over its survival, though it has sufficient funds to make it through to July 2027.
  • The company's chair and chief executive were both forced to resign after criticism of its response to failures in their also between November and January.

Perspectives

Regulator (Ofwat): The package is a necessary first step toward accountability and better performance, and the company must make meaningful, lasting changes to the service it provides and how it operates.

Company (South East Water): The company says it is "genuinely sorry" for the disruption and is working to restore a stable supply; its annual report acknowledges the risk into its finance while stressing funds remain committed through to mid-2027 and negotiations with lenders are already under way.