Ofwat to review South East Water's licence

(Sharecast News) - The water regulator has launched a fresh investigation into South East Water, after repeatedly supply outages across parts of Kent and Sussex. Ofwat said the probe - which was called for by government - will assess whether SEW is complying with the obligation under its licence to provide high standards of customer service and support.

It the first time Ofwat has launched an investigation on the customer-focused licence condition.

People living in and around the spa town of Tunbridge Wells have endured repeated outages since November.

Thousands of properties have been without drinking water for days at a time, leaving homes without water to drink or wash with, and forcing schools and businesses to close.

At the height of the latest outage, which started on Friday, around 30,000 customers and 10,000 properties were affected.

Supplies have now started to resume, but around 8,500 properties were still without water as at Thursday morning.

SEW has blamed various factors for the repeated failures, including most recently the cold snap.

But it has been roundly criticised throughout for its handling of the crisis, including poor communication with customers, chief executive David Hinton refusing to talk to the media and failures around supplying bottled water.

Errors included setting up a water station in the wrong town after staff confused neighbouring Tonbridge - which was unaffected by the outages - with Tunbridge Wells.

Hinton, who has a base salary of £400,000 and received a £115,000 bonus last year, insisted when questioned by MPs the company was handing the crisis well.

Lynn Parker, senior director for enforcement at the regulator, said: "The last six weeks have been miserable for businesses and households across Kent and Sussex.

"We know that this has had a huge impact on all parts of daily life and hurt businesses, particularly in the run-up to the festive period.

"This is why we need to investigate and to determine whether the company has breached its licence condition."

In a statement, SEW said: "The company will always full co-operate with any investigation by our regulators and provide any information required."

Should Ofwat found SEW has breached the licence condition, it could potentially revoke the licence. The utility also faces penalties of up to 10% of turnover, even if it keeps its licence, should breaches be confirmed.

The investigation will run alongside an ongoing probe into SEW's supply resilience, which the regulator launched in November.