South East Water could lose its operating licence after residents across Kent and Sussex faced up to a week without water. The environment secretary, Emma Reynolds, has called for the regulator Ofwat to review the company's licence. If revoked, the company would enter a special administration regime until a new buyer is found.
Ofwat may impose a fine of 10% of annual turnover instead of revoking the licence, as it did with Thames Water in 2024. This week, 30,000 properties experienced low or no water, with 17,000 still affected, many in Tunbridge Wells. This is the second outage in two months for the town, following a two-week disruption for 24,000 households before Christmas.
The company blamed bad weather for leaks in its ageing pipe system. Water companies have a statutory duty to maintain sufficient wholesome water supply. Reynolds said: 'It's completely unacceptable. I'm calling on the chair of South East Water to explain why this continues to happen and Ofwat to review if the company is meeting the requirements of its operating licence.'
Chief executive David Hinton, who earns a base salary of £400,000 and received a £115,000 bonus last year, has faced calls to resign. He gave himself an eight out of ten for handling shortages at a parliamentary committee. NatWest Group Pension Fund, a 25% shareholder, said it was 'extremely concerned' and would pressure the board.
An Ofwat spokesperson said: 'We are concerned that residents are without water again. Ofwat already has an active investigation into South East Water related to its supply resilience. We will review all evidence before deciding on further action.' The company said it was doing 'everything' to support customers and would co-operate with any investigation.
