Ofwat proposes £22m fine for South East Water for repeated supply failures

5 March 2026

• Fine proposed following multiple supply interruptions in Kent and Sussex between 2020 and 2023.
• South East Water lacked ownership for fixing the root cause of supply interruptions and did not maintain key infrastructure.
• Ofwat’s investigation found that the company failed to maintain supply system resilience to minimise incidents occurring and failed to plan to ensure it had sufficient headroom during high demand periods. Ofwat has proposed a £22m fine for South East Water following an investigation into multiple supply disruptions between 2020 and 2023, which affected more than 286,000 people.

The investigation found that the company failed to plan sufficiently, learn from incidents and conduct root cause analysis to maintain resilience within its water supply system, and was therefore unable to cope during periods of high demand or extreme weather. The company also failed to maintain key infrastructure such as service reservoirs, boreholes and major pipes.

All of these issues left the system more likely to fail during prolonged dry periods or freeze thaw events as we have seen in Kent and Sussex on multiple occasions.

As a result of the disruptions, customers had no tap water, were unable to shower or bathe, and unable to flush their toilets, which caused immense stress and anxiety.

Ofwat’s investigation found that the company’s response was slow and disorganised, with shortages of bottled water and not enough tankers or support for vulnerable customers. It also failed to learn lessons from previous incidents, including the Beast from the East in 2018.

South East Water has not taken ownership of these issues and as a result, supply interruptions are still happening too often. Our proposed enforcement order sets out the steps we expect the company to take, including senior management responsibility to fix the problems to prevent them from happening again.

Ofwat is also proposing a £22m fine which reflects the severity of the issues, the company’s mismanagement and the impact this had on customers.

A consultation will now open on this proposal for the public and stakeholders to provide feedback before Ofwat confirms its final decision. The consultation will be open until 13 April 2026.

Chris Walters, interim CEO, at Ofwat said:

“South East Water’s significant failings caused major disruption and had a huge impact on thousands of its customers. Not only did the company fail in its duty to provide a water supply to meet the demands of its customers, but it also fell short when it came to providing support for customers who lost their supply. They must do better.

“This investigation gets to the heart of the company’s supply resilience problems. We want to see South East Water take more responsibility and get on with fixing things for its customers.”
Ofwat has launched a new, separate investigation into South East Water, following major supply interruptions in November and December 2025, and January 2026. This investigation will determine whether the company complied with its customer-focused licence condition, which requires companies to provide a high level of support to customers when issues arise. This licence condition was introduced in February 2024.

Ofwat and the Drinking Water Inspectorate (DWI) have worked closely to secure compliance with their respective powers. In particular, Ofwat has considered the enforcement actions already issued by DWI as a result of its investigations.

Ofwat is working with the UK and Welsh governments on the implementation of water reforms while strengthening our collaboration with partner regulators.

Until these new arrangements are in place, we will keep working hard to drive water companies to improve performance and deliver maximum value for customers, communities, and the environment.

ENDS

Notes to editors

• The exact fine Ofwat is proposing is £22.46m, which is 8% of the company’s turnover.
• The consultation for customers and stakeholders to have their say on this proposal can be found here: Notice of Ofwat’s proposal to issue an enforcement order and impose a penalty on South East Water Limited – Ofwat
• The consultation will be open until 13 April 2026. Following this, Ofwat will consider the representations made and make a final decision on the fine to be imposed.
• Ofwat undertook incident research into the June 2023 outage. This was published in November 2023.
• In considering this case, Ofwat has taken into account the enforcement actions on the Security and Emergency Measures Direction already issued by DWI.
• Ofwat can impose a financial penalty on the company, the value of which can be up to 10% of relevant turnover. Please find information relating to how we apply the level of penalty here: Statement of policy with respect to financial penalties pursuant to section 22A of the Water Industry Act 1991 (ofwat.gov.uk)