In February and March 2018, the quick thaw that followed the ‘Beast from the East’ left many customers in England and Wales with little or no water. In response, we launched a review that culminated in our June report ‘Out in the Cold’. Our report found that water companies needed to ensure they will be better prepared, better at responding and better at talking to their customers.
All companies published responses to our report at the end of September. Four companies (Thames Water, Southern Water, Severn Trent Water and South East Water), were required to submit externally assured detailed action plans.
On 22 November 2018 we published our responses to these plans. This page explains what we found, what happens next and the areas we looked at. You can find links to the letters we’ve sent companies to the right of this page.
We’re also announcing the recommendations we’re making to the UK and Welsh Governments around compensation.
Our Out in the Cold report found that the current compensation scheme isn’t fair, fast or free from hassle, so we put out a call for evidence to figure out how to make it right. The most important changes we’re recommending happen right now are:
- The amounts customers are compensated when they lose water should go up. For example, we’re recommending a customer who doesn’t have water for two days should receive £120, rather than the current £30.
- Customers should receive compensation at more regular intervals when they’re left without water – every 12 hours, rather than 24.
- All compensation payments should be sent out automatically, meaning customers no longer have to submit claims.
While the changes are being considered by both Governments, we expect all companies and retailers to reflect on our recommendations when setting their own compensation schemes. We also think there’s potential to review the compensation rules more comprehensively in the future.
What’s happened since our review?
Our focus is on looking out for customers by challenging companies to work together and to be prepared for this winter coming and in following years. We’ve worked closely with the Consumer Council for Water (CCWater), the Department of Environment, Food and Rural Affairs (Defra), the Drinking Water Inspectorate (DWI) and the Welsh Government throughout this process, and have engaged with stakeholders across the sector and beyond.
We’re pleased to see some real progress being made, but the work doesn’t end here. It’s vital that companies own this work, push themselves to keep learning and push themselves to do right by their customers.
Where we’ve seen progress
- Companies are collaborating with more key partners, including resilience forums, local authorities and emergency services.
- Companies are collaborating with each other, showing a commitment to best practice sharing.
- Some companies have tested their approaches during the hot summer, incorporating the lessons they’ve learned since winter.
- Companies have worked to improve their stocks of bottled water.
Where we need more progress
- We’re concerned some companies have more work to do to be ready for winter. We’ve written to companies to let them know where they need to improve and what happens next.
- There needs to be a vast improvement in the way wholesalers interact with retailers.
- Companies need to be thinking more carefully about identifying and supporting customers in vulnerable circumstances.
- Water UK needs to do more to co-ordinate and lead the work to push the sector onwards, and companies need to make it a priority to work collaboratively.
What happens next?
Water companies have a duty to take responsibility for preparing for and managing what happens during extreme weather to make sure customers are protected. It’s for them to own these improvements and developments going forward.
- The sector – We’ve asked Water UK to drive the sector’s work forward. We’ll be keeping a close eye on their progress reports.
- Defra – We’ve agreed with Defra, which oversee the Security and Emergency Measures Direction (SEMD) that issues identified in our reviews should be considered as part of the SEMD certification process this winter.
- Ofwat – We’ll focus on our role of holding companies to account. We aren’t rubber stamping plans or initiatives, and we’ll be watching closely to see that companies deliver.
*Our analysis is without prejudice to and does not pre-judge any analysis or decisions to be made during the price review including, but not limited to, any additional expenditure that may be allowed in the next price review period for initiatives identified in response to the freeze and thaw review. The PR19 team are assessing the robustness of all companies’ business plans and will provide their determinations in 2019, in line with our published methodology.