The government has announced strict new measures to hold water companies accountable for failing their customers.
The new government consultation launched today outlines that households and businesses should receive higher compensation rates from water companies in a broader range of scenarios when essential water services are disrupted.
The proposals, introduced by Environment Secretary Steve Reed, will double the compensation customers are legally entitled to when water companies fail to meet key standards.
Following an eight-week consultation, the government plans to also more than double payments for highly disruptive incidents, such as failing to notify customers of supply interruptions or missing scheduled appointments.
Additionally, the government will broaden the circumstances that trigger compensation. This includes automatic payments for boil notices—when water needs to be boiled before use—and for failures in meter readings or installations as promised.
Boil notices require customers to boil water before drinking, cooking, or brushing their teeth. Under the new rules, recent water outages in Brixham and Bramley would have automatically resulted in compensation for all affected customers, where previously no such entitlement existed.
Welcoming the launch of the consultation, Jenny Suggate, Director of Policy, Research and Campaigns at CCW, said:
We’re delighted the government is fast-tracking efforts to improve the Guaranteed Standards Scheme, with the potential to boost compensation and support for hundreds of thousands of people each year when they are let down by their water company.
Given that there has been little change to the standards since they were first introduced, an overhaul is long overdue, and we know it is a pressing priority for household and business customers.
Demanding higher standards of service and improving levels of compensation when things go wrong will incentivise water companies to get things right the first time for all customers.
Based on an average annual water and sewerage bill of £440, the minimum payment of £40 under these proposals would now represent approximately 10% of the typical annual bill, with some payments potentially reaching a quarter of this amount. For example, compensation for low water pressure could be as high as £250, while internal sewer flooding could lead to payments of up to £2,000.
The Guaranteed Standards Scheme outlines the baseline for customer service in the water sector, covering issues like timely water supply restoration after an interruption, responding to written complaints, and managing sewer flooding risks. The compensation levels for failing to meet these standards have not been updated since 2000.
This consultation follows the Government’s announcement of the Water (Special Measures) Bill, aimed at reducing sewage spills and attracting investment to upgrade infrastructure. The bill includes measures such as:
– Strengthening regulations to hold water company executives personally criminally liable for legal violations;
– Granting the water regulator new powers to withhold bonuses if environmental standards are not met;
– Enhancing accountability for water executives through a new ‘code of conduct’ for water companies, allowing customers to hold executives to account;
– Introducing new powers for automatic and severe fines;
– Requiring water companies to install real-time monitors at all sewage outlets, with data independently reviewed by regulators.
The consultation will run from Monday, August 12, to Monday, October 7, with a government response to follow after its conclusion.
Further legislation will be outlined in due course to fundamentally reform the water sector and restore the health of rivers, lakes, and seas.