Government Proposes Higher Compensation for Substandard Water Service
The UK government is proposing that water companies increase compensation payments to customers when they fail to meet basic service standards. This initiative includes new rules for what triggers these payments, such as failing to perform meter readings or installations as promised.
Under the proposal, customers could be eligible to claim at least 25% of their annual water and sewerage bill in certain cases. The minimum payment for most service failures would double to £40.
These proposed changes follow the introduction of the Water (Special Measures) Bill, announced in the King's speech last month, which aims to enhance water quality across the country.
Environment Secretary Steve Reed emphasized the need for reform, stating, "The new Government will clean up the water industry and turn the tide on the destruction of our waterways, ensuring that water companies protect the interests of their customers and the environment."
The list of situations that would automatically trigger compensation is also set to expand. For instance, customers would receive automatic payments in cases where they are issued a boil notice—an advisory to boil water before consumption or use in cooking.
The proposed changes would mean that recent incidents, such as water outages in Brixham and Bramley earlier this year, would have resulted in automatic compensation for all affected customers, whereas currently there was no entitlement.
The minimum compensation payment under these proposals would be £40, which is around 10% of the average annual water and sewerage bill, estimated at £440. For more severe issues, such as low water pressure, compensation could reach up to £250, while internal flooding from sewers could result in payments as high as £2,000.
The standards that water companies are expected to meet are detailed in the Guaranteed Standards Scheme, which outlines the baseline for customer service in the water sector. These standards include timely restoration of water supply after interruptions, prompt responses to written complaints, and effective management of sewer flooding risks.
Subject to an eight-week consultation period, the government's proposals would double compensation payments for all existing standards. Additionally, the payments for certain highly disruptive incidents, such as failure to provide notice of supply interruptions or missing arranged appointments, would more than double.
If implemented, these measures would mark the first significant change in customer compensation levels since 2000.