South East Water to pay £30.5m penalty after Ofwat investigations find ‘repeated’ supply
South East Water will have to pay £30.5million after investigations by the water regulator found there had been ‘repeated’ supply failures.
Regulator Ofwat said the redress package follows three investigations into the water supplier and includes a previously proposed £22million fine for supply disruptions between 2020 and 2023, which affected more than 286,000 people.
It found that the company had ‘failed to plan sufficiently… leaving the system unable to cope during extreme weather or periods of high demand.’
The watchdog launched a second probe at the start of the year following supply issues in Tunbridge Wells and across Kent and Sussex between November 2025 and January 2026, which left up to 70,000 homes without supply.
South East Water left customers with no tap water and facing long delays last year, Ofwat said
Ofwat found that South East Water had ‘failed to communicate clearly and accurately with customers in a timely manner’ and failed to provide customers with adequate supplies of bottled water. It left customers with no tap water and facing long delays at bottled water stations.
The third investigation followed Moody’s downgrade of South East Water’s credit rating in May, meaning the company was in breach of its licence condition.
South East Water will now have to produce and publish a Performance Improvement Plan.
Helen Campbell, executive director of delivery at Ofwat, said: ‘South East Water must now focus on what matters most – its customers.
‘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.
‘This package is the first step towards full accountability and to improving overall performance, and we welcome the company’s engagement to bring these cases to a conclusion.’
The £30.5million redress package will be paid for by South East Water’s shareholders and not through customer bills.
It includes £5million to provide free water butts for households, £5million to bring forward smart metering to non-household customers, and £5million for on-site storage to help manage their supply during peak periods.
The company must also ringfence £13million of the package towards its turnaround plan, as well as £1million for storage and works at vulnerable sites and £1.5million for a community fund to provide support for areas affected by supply failures.
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.
‘Our priority has been to ensure that the resolution of this investigation directly benefits those who suffered the most.
‘By working in collaboration with Ofwat, we have agreed to a £30.5 million redress package, which will be wholly funded by South East Water’s shareholders. Choosing this route over a standard fine means these significant funds will directly benefit those customers who were impacted, some of them on multiple occasions.’
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