Yahoo Finance Regulator condemns ‘beast from the east’ water supply failings
Households could be in line for much higher compensation payouts when their water is cut off following a damning watchdog report into supply failures during the “beast from the east” weather events this year.
Ofwat said multiple failings by privatised water companies left 200,000 households in England and Wales cut off, some for several days, yet the compensation payout totalled only £7m.
In a strongly worded rebuke to four of the main water companies – Thames Water, Severn Trent, Southern Water and South East Water – Rachel Fletcher, the chief executive of the water industry regulator, said customers had been badly let down.
In late February and early March, blizzards, strong winds, drifting snow and bitter cold caused major disruption across the UK. However, Ofwat said that while many water companies in the north of England and Wales were properly prepared, those in the south were slow and reactive.
“Many customers were effectively left to fend for themselves, with local bodies and volunteers having to fill the gap,” Fletcher said. She said that in too many areas there was “radio silence on what was happening, [with] businesses shut down and customers forced to make long journeys to pick up bottled water”.
Ofwat suggested that the compensation payouts were inadequate to reflect the hardships some customers went through. It said: “We are concerned that the current compensation arrangements – the guaranteed standards scheme – are not reflective of the impact on customers of being without water for a prolonged period. We intend to launch a consultation by the end of July 2018 with a view to making proposals to revise the GSS.”
The four worst-performing companies have been ordered to produce a belt-and-braces review of their emergency planning by 28 September to ensure that households won’t be left without water again when bad weather hits.
Ofwat highlighted big differences between the speed and quality of response of water companies, despite similar or tougher weather conditions. “For example, Severn Trent and United Utilities share a border and faced similar weather conditions but their customers had extremely different experiences,” it said.
Research by the Consumer Council for Water suggested that almost three-quarters of customers who were affected did not receive alternative supplies of water. It added that many high-priority customers – such as schools, emergency services and councils – received little or no proactive communication before, during or after the weather events.
Some companies were hindered by the large number of small bursts on customer premises. “This dispersed pattern of small bursts, combined with a lack of additional production availability, created major supply problems that were not picked up early enough by some companies,” Ofwat said.
However, the regulator dismissed arguments that the “beast from the east” was a one-off weather event.
Fletcher said: “The freeze and rapid thaw earlier this year was forecast and was not unprecedented. A number of water companies showed what can be done to serve customers in the face of bad weather. But too many companies were caught off-guard and let people down, causing real hardship as a result. Our report shows there is no excuse for this level of failure.”
Ofwat’s analysis of the weather conditions found that while the 2018 freeze and thaw was severe, it was not unprecedented. “In fact, as recently as 2010-11 there was a more severe freeze and thaw,” it said.
Michael Roberts of Water UK, which represents the water companies, highlighted how the extreme weather resulted in only 3% of customers being affected. “The impact varied across the country, with Ofwat saying that fewer than 3% of all customers were affected,” he said. “But we’re sorry to say that in some areas significant numbers of customers experienced disruption and hardship, and we are determined to prevent this happening again in future.
“Since 1989, water companies have invested around £150bn to keep improving the industry and as a result customers are now five times less likely to suffer from supply interruptions.”
Many of the problems with water supply only emerged as temperatures rose and the thaw prompted flooding. All households in London and the south-east were told to cut their water use, take short showers rather than baths and defer running washing machines and dishwashers.
