South East Water face £22m fine – but that clearly hasn’t been enough to stop it

On 5 March, Ofwat proposed a fine of over £22m to lax water firm South East Water. The news comes on the heels of an investigation into the companies repeated failures across 2020-2023.

These supply disruptions affected upwards of 286,000 people. Often, customers were left without running water, meaning they were unable to bathe, clean dishes, or even flush the loo.

However, the fine isn’t a done deal just yet. Ofwat is running a customer consultation on the fine until 13 April. If you want to have your say, follow the link here.

South East Water ‘failed to plan sufficiently’

The report itself was damning, finding that South East Water:

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.

Taken together, these issues meant that South East Water’s was more likely to fail in the face of both freeze-thaw events and long dry periods.

Ofwat accused the water firm of lacking organisation, responding slowly to key issues, and failing to learn from previous mistakes. Worse still, the water watchdog stated that:

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.

‘Significant failings’

Given the severity of the issues, the full fine that Ofwat is proposing is £22.46m. That’s equal to 8% of the South East Water’s annual turnover.

The maximum penalty which the regulator could impose is equal to 10% of a company’s turnover. In South East Water’s case, this would run a bill of just over £28m.

Ofwat’s consultation for customers and stakeholders is already open. After it closes on 13 April 2026, Ofwat will weigh the responses and make its final decision.

Chris Walters, Ofwat’s interim CEO, 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.

Legal challenge

Funding body the Utilities Trust of Australia currently owns a 50% share of South East Water, along with a group of other pension and investment funds.

South East Water has already filed for a judicial review in response to Ofwat’s proposed fine. The water firm also  requested an injunction, although the court swiftly rejected the plea.

Of course, given that the fine was issued for failures back in 2020-2023, it hasn’t taken into account any of the company’s more-recent massive fuckups. Back in December 2025, the Canary reported that:

Only last week, 6,500 properties were without water. Whilst the company restored the supply on Friday, January 16, it then left a further 5,500 homes without water on Sunday evening. This was due to a treatment works fault, a power outage and two burst mains – all at the same time.

And then again, on 19 January:

Over the last few weeks, South East Water left customers across Kent without water on several occasions.

Only last week, 6,500 properties were without water. Whilst the company restored the supply on Friday, January 16, it then left a further 5,500 homes without water on Sunday evening. This was due to a treatment works fault, a power outage and two burst mains – all at the same time.

Adding insult to injury, South East Water had the nerve to claim that they’ll have to increase customers’ water bills. That’s in spite of Ofwat’s ban on further price hikes, which the company have appealed against.

Meanwhile, the water supplier’s profits have continued to climb. South East Water reported profit before tax of £18.2m for the six months up to October 2025, up from £2.6m the previous year.

To put that another way, South East Water are still failing to fix their mistakes, demanding that customers pay more, and raking in over £15m profit increases.

Further investigation

As such, Ofwat has already launched a new investigation of the supply interruptions in November and December 2025, and January 2026. The watchdog stated that:

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.

However, as the failures from 2020 have made abundantly clear, the threat of fines hasn’t been nearly enough to make South East Water mend its ways. This company is doing less than the bare minimum, leaving customers without water, and letting its infrastructure go to ruin.

And it’s still turning a massive profit.

This is privatisation in action – a system that allows companies to extract money from customers who literally have no other choice. The system is, and has always been, wide open to abuse. We can’t allow this to stand – we must call to end the failed experiment that is privatisation.

Featured image via the Canary