Big compensation payments announced for aggrieved water consumers in England – but Welsh customers must wait

Martin Shipton

Compulsory compensation payments made by water companies to consumers when things go wrong have increased in some cases by tenfold in England – but Wales has yet to benefit from the changes introduced on July 2.

Customers in England will automatically receive more money for issues such as continued low water pressure and cancelled appointments.

A key step in the UK Government’s mission to reform the water sector, the move marks the first uplift in compensation rates in 25 years, with the government recognising the urgent need to bring payments in line with inflation and properly compensate households for poor service.

Flooding

Severe issues such as flooding will see compensation for customers in England double from £1,000 to up to £2,000, while households suffering consistent low water pressure will be automatically eligible to receive up to £250 – a huge uplift from the previous compensation rate of just £25.

No action will be needed from eligible customers as payments will automatically be credited back to their accounts.

Environment Secretary Steve Reed said: “Too many water companies are letting down their customers – with leaking pipes, poor water supply and low water pressure.
“The government is holding water companies to account by making them put money back into people’s pockets when they fail their customers.

“We are also working with water companies to expand the list of circumstances that will trigger compensation payments. Compensation for when customers are asked to boil their water due to contaminated supply will come into force later this year.”

The standards, outlined in the Guaranteed Standards Scheme, set out a baseline for customer service in the water sector. They include providing timely restoration of water supply following an interruption, responding to written complaints and managing the risk of sewer flooding.

This comes as part of the UK Government’s action to cut sewage spills and attract investment in the sector, including:

Strengthening regulation to ensure polluting water bosses who cover up their crimes now face two-year prison sentences.

Banning unfair bonuses for bosses of six polluting water companies.

Launching a record 81 criminal investigations into sewage pollution.

Securing £104bn in private sector investment to upgrade crumbling sewage pipes and cut sewage by nearly half by 2030.

Modernise

Launching the Independent Water Commission led by Sir John Cunliffe to modernise the water industry and work with companies and their investors to make the industry one of growth and opportunity.

Mike Keil, chief executive of the Consumer Council for Water, said: “Customers expect to be treated fairly when their water company lets them down, so we’re delighted the government has moved at pace to strengthen service standards.”

“This should give people peace of mind; they now have far stronger protection from a much broader range of water company service failures – from the slow installation of water meters to the mishandling of debt recovery. As well as bolstering payments for thousands of customers, these changes mark an important step towards restoring trust in the water sector which is at an all-time low.

David Black, chief executive of Ofwat said: “We welcome these improvements to guaranteed standards and payments for customers.

“When customers suffer from problems like low pressure, disruptions to supply or sewer flooding they can experience major stress and inconvenience, and payment amounts must recognise the disruption to their lives when standards are not met.

“These new changes are another way to make sure customers are protected when companies get it wrong.”

But in Wales, people were left wondering why the Welsh Government had not acted in concert with the changes in England.

‘Worse off’

A water industry source said: “This is very poor and leaves water consumers in Wales – in other words everybody – worse off than consumers in England. Some of the differences are quite substantial. The Welsh Government should pull its finger out.”

In Wales the maximum compensation for a sewage-flooded home is the cost of annual sewage charges, with a minimum payment of £150 up to a maximum of £1,000. And low water pressure compensation remains at £25.”

The Welsh Government said: “We commissioned Ofwat to undertake a review of the Guaranteed Service Standard Scheme focusing on evidence from Welsh stakeholders and water companies.

“Ofwat will shortly be holding a public consultation on proposals to update the scheme and recommendations will be made this autumn.”

Since 2018, Dwr Cymru Welsh Water has, on a voluntary basis, increased the payments to exceed the minimal levels set out in the regulations.