South East Water has avoided a £22 million fine for supply failures that left hundreds of thousands of customers without water, after regulator Ofwat agreed to a £30.5 million redress package instead. The decision reverses an earlier proposal in March to penalise the company for “multiple supply disruptions” that caused residents in Kent and Sussex “immense stress and anxiety”.
Ofwat's Redress Package
Following negotiations, Ofwat announced “undertakings” and a “redress package” in lieu of the fine. The regulator insisted that not fining the firm was the best way to ensure customers benefit, rather than the money flowing to the Treasury. The package includes £13 million from shareholders to address root causes of failures, plus investments in temporary water storage and customer support measures.
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. But the work doesn’t stop today - South East Water needs to make meaningful, lasting changes to ensure customers can rely on the service they receive.”
Background of Failures
The proposed £22 million fine in March followed an investigation into supply disruptions affecting more than 286,000 customers across Kent and Sussex between 2020 and 2023. Ofwat found the company had “failed to plan sufficiently, maintain key infrastructure or learn from previous incidents - leaving the system unable to cope during extreme weather or periods of high demand”.
A second investigation opened in January 2026 after 70,000 homes in Tunbridge Wells and across Kent and Sussex were left without supplies from November 2025. South East Water blamed Storm Goretti, but Ofwat said the company “failed to communicate clearly and accurately with customers in a timely manner and did not provide all affected customers with adequate bottled water supplies.”
CEO Compensation and Resignation
South East Water boss David Hinton resigned in May 2026 after being criticised by MPs over the company's track record. However, he has been allowed to remain in post “to allow an orderly transition over the summer period”. The 58-year-old earned £457,534 in pay and perks in the 2024/25 financial year, including a salary of over £300,000, a £115,000 annual bonus, and more than £30,000 in pension contributions. His base salary surged by 30% to £400,000 in April 2025, when customers’ bills rose by a fifth, and he received a £50,000 perk for implementing the price hike. The firm’s annual report indicates he is due a £38,000 payout from a long-term reward scheme.
Hosepipe Ban and Apology
South East Water has apologised to 850,000 customers after announcing a hosepipe ban in Kent, citing demand outstripping supply during hot weather. The company said it was taking steps to improve resilience.
