Source · Select Committees · Environment, Food and Rural Affairs Committee
8th Report – Failures at South East Water
Environment, Food and Rural Affairs Committee
HC 1861
Published 1 May 2026
Government response
3rd Special Report - Failures at South East Water: Government Response · published 10 Jul 2026
Recommendations & Conclusions
1
Conclusion
Accepted
Select committees do not often focus directly on the leadership, behaviour and performance of individual...
Conclusion
Select committees do not often focus directly on the leadership, behaviour and performance of individual private companies. The water sector, however, is a highly regulated monopoly provider of services essential to public health. Residents have no choice over their water …
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Government Response Summary
The government acknowledges South East Water's failures and commits to significant reforms of the water sector, including measures from the Water (Special Measures) Act like banning unfair bonuses and ringfencing investment. It also plans to introduce a Clean Water Bill for a single, powerful regulator with greater supervisory capacity and no-notice inspections, and highlights £104 billion in investment for supply infrastructure.
Department for Environment Food and Rural Affairs
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2
Conclusion
Acknowledged
South East Water did not have the right processes in place to identify and mitigate...
Conclusion
South East Water did not have the right processes in place to identify and mitigate risks at Pembury Works, despite previous warnings from the DWI. That the company had “normalised” critical risks and was “flying blind” in the lead up …
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Government Response Summary
The government acknowledges South East Water's serious failings in risk identification and mitigation processes by detailing ongoing regulatory actions, including a credit rating downgrade, a licence breach, a proposed £22 million penalty, and placement into a formal Transformation Programme. It stresses that the company must now demonstrate credible leadership and delivery, and highlights increased customer compensation standards.
Department for Environment Food and Rural Affairs
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3
Conclusion
Acknowledged
Maintenance issues at Pembury contributed to the Tunbridge Wells incident in 2025, but it is...
Conclusion
Maintenance issues at Pembury contributed to the Tunbridge Wells incident in 2025, but it is South East Water’s self-identified lack of proactive and “instinctive” maintenance across its network that is most concerning. One of the most fundamental and basic responsibilities …
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Government Response Summary
The government acknowledges South East Water's serious failings in maintenance by detailing ongoing regulatory actions, including a credit rating downgrade, a licence breach, a proposed £22 million penalty, and placement into a formal Transformation Programme. It stresses that the company must now demonstrate credible leadership and delivery, and highlights increased customer compensation standards.
Department for Environment Food and Rural Affairs
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4
Conclusion
Accepted
As regulators told South East Water repeatedly and jointly for over four years, the company...
Conclusion
As regulators told South East Water repeatedly and jointly for over four years, the company needed to invest in new infrastructure to be properly resilient to potential shocks. In particular, single points of failure, supply shortfalls and regional connectivity should …
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Government Response Summary
The government states it is working to strengthen the resilience of supply infrastructure, highlighting the water sector’s PR24 investment programme which commits over £104 billion in investment between 2025 and 2030.
Department for Environment Food and Rural Affairs
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5
Conclusion
Acknowledged
Despite South East Water’s assertions to the contrary, periods of peak demand and extreme weather...
Conclusion
Despite South East Water’s assertions to the contrary, periods of peak demand and extreme weather can and should be broadly predicted and prepared for. Ofwat and the Drinking Water Inspectorate have shown that the company failed to model upcoming peaks …
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Government Response Summary
The government acknowledges South East Water's serious failings in prediction, planning, and incident response by detailing ongoing regulatory actions, including a credit rating downgrade, a licence breach, a proposed £22 million penalty, and placement into a formal Transformation Programme. It stresses that the company must now demonstrate credible leadership and delivery, and highlights increased customer compensation standards.
Department for Environment Food and Rural Affairs
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6
Conclusion
Acknowledged
Both the Drinking Water Inspectorate and South East Water acknowledge the weaknesses of the escalation...
Conclusion
Both the Drinking Water Inspectorate and South East Water acknowledge the weaknesses of the escalation processes around the Pembury incident. This meant that operational staff were not given sufficient support to diagnose problems early and that key stakeholders were informed …
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Government Response Summary
The government acknowledges South East Water's serious failings in escalation processes and crisis command by detailing ongoing regulatory actions, including a credit rating downgrade, a licence breach, a proposed £22 million penalty, and placement into a formal Transformation Programme. It stresses that the company must now demonstrate credible leadership and delivery, and highlights increased customer compensation standards.
Department for Environment Food and Rural Affairs
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7
Conclusion
Acknowledged
Given the huge number of supply interruptions that South East Water has failed to manage...
Conclusion
Given the huge number of supply interruptions that South East Water has failed to manage over the years, it is remarkable that the company still struggles with the supply of bottled water during outages, has failed to learn and apply …
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Government Response Summary
The government acknowledges the serious failings of South East Water, highlighting ongoing regulatory enforcement and proposed penalties from Ofwat and DWI. It notes that it has doubled customer compensation and introduced new standards for supply outages and boil water notices.
Department for Environment Food and Rural Affairs
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8
Conclusion
Acknowledged
Similarly to the provision of alternative water supplies, South East Water now has years of...
Conclusion
Similarly to the provision of alternative water supplies, South East Water now has years of experience in communicating during supply interruptions. It is incomprehensible that SEW still lacks a crisis communications strategy or a well-developed communications team given the company’s …
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Government Response Summary
The government acknowledges South East Water's serious failings, detailing ongoing regulatory enforcement, proposed penalties, and new compensation standards for customers. It states the government is working with regulators to ensure a strong, coordinated response to protect customers.
Department for Environment Food and Rural Affairs
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9
Conclusion
For a company with such regular issues with outages, South East Water’s approach to supporting...
Conclusion
For a company with such regular issues with outages, South East Water’s approach to supporting vulnerable customers gives the impression of a business caught completely by surprise. We accept that it is challenging to continuously update the Priority Services Register: …
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Department for Environment Food and Rural Affairs
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10
Conclusion
Acknowledged
The Tunbridge Wells incident and Ofwat investigations reveal that South East Water’s leadership has repeatedly...
Conclusion
The Tunbridge Wells incident and Ofwat investigations reveal that South East Water’s leadership has repeatedly proved itself incapable of implementing the lessons learnt from previous incidents, even simple ones such as having a communication strategy for when resolution timeframes are …
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Government Response Summary
The government acknowledges that South East Water's leadership has taken responsibility for failings, noting the resignations of the Chair and Chief Executive. It states the company must now implement changes and commits that the government and regulators will continue to work with the company through regular performance meetings during this transition.
Department for Environment Food and Rural Affairs
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11
Conclusion
Acknowledged
Since at least 2020, South East Water clearly has had, and continues to demonstrate, an...
Conclusion
Since at least 2020, South East Water clearly has had, and continues to demonstrate, an inability to establish the root causes of its supply resilience problems. There are likely many facets to this, including a failure to monitor the key …
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Government Response Summary
The government acknowledges South East Water's serious failings in identifying root causes by detailing ongoing regulatory actions, including a credit rating downgrade, a licence breach, a proposed £22 million penalty, and placement into a formal Transformation Programme. It stresses that the company must now demonstrate credible leadership and delivery, and highlights increased customer compensation standards.
Department for Environment Food and Rural Affairs
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12
Conclusion
Acknowledged
South East Water’s leadership team has demonstrated a clear preference for blaming factors outside of...
Conclusion
South East Water’s leadership team has demonstrated a clear preference for blaming factors outside of their control for performance issues, and in some cases, they continue to do so, despite clear evidence to the contrary. A lack of data-analysis skills …
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Government Response Summary
The government acknowledges South East Water's serious failings and culture of obfuscating responsibility by detailing ongoing regulatory actions, including a credit rating downgrade, a licence breach, a proposed £22 million penalty, and placement into a formal Transformation Programme. It stresses that the company must now demonstrate credible leadership and delivery, and highlights increased customer compensation standards.
Department for Environment Food and Rural Affairs
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13
Recommendation
Acknowledged
South East Water has failed to engage with key stakeholders outside the company to help...
Recommendation
South East Water has failed to engage with key stakeholders outside the company to help it learn from its mistakes. It is unwilling to properly listen to its customers, who have repeatedly complained of addressable failures 42 and yet continue …
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Government Response Summary
The government acknowledges South East Water's cultural failures by detailing ongoing regulatory actions, including a credit rating downgrade, a licence breach, a proposed £22 million penalty, and placement into a formal Transformation Programme. It stresses that the company must now demonstrate credible leadership and delivery, and highlights increased customer compensation standards.
Department for Environment Food and Rural Affairs
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14
Conclusion
Accepted
Continued leadership failure is grounds for leadership change.
Conclusion
Continued leadership failure is grounds for leadership change. Time and again, since 2020, South East Water’s leadership has failed in its fundamental task of supplying water to its customers. That is around six years of poor performance, sometimes with multiple …
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Government Response Summary
The government acknowledges South East Water's leadership failures and notes the resignations of the Chair and Chief Executive, indicating that leadership change has occurred. It commits to working with the company and regulators through regular performance meetings during the transition to new leadership.
Department for Environment Food and Rural Affairs
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15
Conclusion
Acknowledged
These failures are symptomatic of significant cultural problems that cannot be readily explained by issues...
Conclusion
These failures are symptomatic of significant cultural problems that cannot be readily explained by issues with the wider regulatory framework: this includes South East Water’s failure to engage with external stakeholders, inclination for groupthink, inability to analyse problems, incapability to …
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Government Response Summary
The government acknowledges that South East Water's leadership has taken responsibility for cultural failings, noting the resignations of the Chair and Chief Executive. It states the company must now implement changes and commits that the government and regulators will continue to work with the company through regular performance meetings during the transition to new leadership.
Department for Environment Food and Rural Affairs
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16
Recommendation
Accepted in Part
Repeating the same actions and expecting different results is not a well- regarded tactic for...
Recommendation
Repeating the same actions and expecting different results is not a well- regarded tactic for resolving problems. Yet the non-executives of South East Water have time and time again chosen to back a leadership that is clearly not capable of …
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Government Response Summary
The government acknowledges that a new leadership team is in place following the resignations of the Chair and Chief Executive, stating the company must now implement necessary changes. It commits that the government and regulators will continue to work with South East Water through regular performance meetings during this transition.
Department for Environment Food and Rural Affairs
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