South East Water told to cough up £31m and improve infrastructure
South East Water has been ordered to cough up a hefty redress and create an improvement plan for its operations after multiple investigations by the industry regulator found failures in its infrastructure and customer service.
The utility firm – which supplies drinking water to 2.3m customers across the likes of Kent, Sussex and Surrey – has agreed to a £30.5m redress package to compensate the community it serves and fix its own systems.
Around £13m of this package will go towards fixing its broken infrastructure whilst £11.5m will be used for smart meters and localised store facilities to prevent shortages during peak summer or winter demand.
Some £5m will be used to give away free water butts to households in a bid to help lower overall demand. The remaining £1.5m will be allocated to a community fund to support local charities and groups in the worst-hit areas of Kent and Sussex.
The regulator said the cash to fund this will come directly from shareholders’ profits, as opposed to customer bills.
South East Water failures left customers unable to bathe
It follows three separate investigations by Ofwat into South East Water, with the watchdog finding between 2020 and 2023 over 286,000 customers in Kent and Sussex lost water after the company failed to maintain pipes leaving the network vulnerable in hot summers or cold winters.
In late 2025 and the beginning of this year, an investigation found another 70,000 homes lost water amidst Storm Goretti. Ofwat said South East Water failed to communicate and didn’t provide enough bottled water, left people unable to bathe and forced school and work closers.
Most recently, South East Water’s financial rating was downgraded by agency Moody’s, which broke the utility firm’s operating licence rules that require water firms to maintain stable ratings.
Helen Campbell, executive director of delivery at Ofwat, 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.”
She added the package was a “step towards full accountability” and would help improve overall performance.
South East Water has committed to producing and publishing a performance improvement plan that will set out its turnaround, which will be monitored by Ofwat.
Earlier this year, the firm was accused of “not taking ownership” of issues with disruptions as it was slapped with a £22m fine.
A spokesperson for South East Water said: “We are incredibly sorry for the historical supply disruptions that affected our customers across Kent and Sussex. We know this caused significant disruption and anxiety, and we accept the failures identified by Ofwat. It is not the standard of service our customers deserve.”