Photo credit: Luis Tosta
South East Water will pay £30.5 million and submit to independent oversight following years of supply disruption across Kent and Sussex. The package concludes three Ofwat investigations into repeated supply interruptions, customer service failings and the company’s recent credit rating downgrade. It will be funded entirely by shareholders rather than through customer bills.
What the investigations found
The first, on which Ofwat consulted in March with a proposed £22 million fine, examined supply interruptions affecting more than 286,000 customers between 2020 and 2023. The regulator concluded the company had failed to plan sufficiently, maintain key infrastructure or learn from previous incidents, leaving the network unable to cope with extreme weather or high demand.
A second investigation opened in January after further interruptions in Tunbridge Wells and across Kent and Sussex between November 2025 and January 2026, including during Storm Goretti, which left up to 70,000 homes without water. Ofwat found the company had not communicated clearly, accurately or quickly with customers, and had not provided all those affected with adequate bottled water. Customers were left without tap water, faced long queues at bottled water stations, and were unable to shower or bathe. Schools closed, some customers had to cancel work, and others struggled to manage medical conditions.
The third followed Moody’s downgrade of the company’s credit rating on 28 May. Licence condition P26 requires South East Water to hold two investment grade credit ratings, so losing one put it in breach. Moody’s cited supply resilience concerns similar to those Ofwat had identified.
Six commitments
The £22 million fine originally proposed in March became a larger package built around direct redress for customers. Shareholders will fund £13 million of further investment following an independent root and branch review of the company’s resilience; £5 million to accelerate smart metering for businesses; £5 million to provide households with free water butts to collect rainwater and reduce demand on the mains; £5 million for on-site storage tanks and smart meters at high-usage businesses to help manage the network at peak times; £1.5 million for a community relief fund directed at the areas that suffered the worst failures; and £1 million to ensure critical settings do not run out of water during a future outage.
Alongside the spending, the company must identify the root causes of its operational failures, supported by an independent technical assessment, and publish a Performance Improvement Plan setting out how it will deliver sustained improvement for customers and the environment.
Ofwat will appoint an Independent Monitor to report directly to the regulator on delivery, with the cost met by the company and separate from the redress package. Procurement will begin at pace.
The two positions
Helen Campbell, Ofwat’s executive director for delivery, said the failures had caused real disruption and hardship over many years, and that interruptions on that scale had happened far too often. She called the package an opening move towards holding the company fully to account, adding that it needed to make meaningful and lasting changes.
South East Water said it was incredibly sorry and accepted the failures identified, acknowledging that its service had fallen short of what customers should expect. It argued that agreeing a redress package rather than a standard fine meant the money would go directly to the customers affected, some of them on multiple occasions. The company pointed to its PR24 business plan and what it called its largest ever investment programme, focused on expanding network resilience and drinking water storage.
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