8th Report – Failures at South East Water

Key findings

• SEW failed to monitor critical treatment parameters at Pembury Water Treatment Works, with the company admitting crucial parameters were not monitored and describing operations as 'flying blind' before the crisis
• Maintenance was inadequate and reactive rather than proactive across SEW's network; staff faced pressure to keep systems running in tight supply-demand conditions, preventing proper routine maintenance
• SEW failed to invest in long-term infrastructure resilience despite four years of joint regulator warnings; regulators found the company had 'normalised risk' and lacked sufficient headroom and interconnectivity in its eastern region
• Incident response planning was non-existent or ineffective; the company had no dedicated outage plans for Pembury Works, avoided difficult scenarios in testing, and escalated the emergency too slowly
• SEW's leadership and board demonstrated a culture of failure: inability to identify root causes, reluctance to take responsibility, and resistance to transparency (attempting to block Ofwat's report publication via injunction); Ofwat proposed a £22.46 million fine and enforcement order
• The 2025 Tunbridge Wells incident caused millions in business losses, school closures, and inadequate support for vulnerable customers; subsequent Storm Goretti outages showed the company could not answer basic factual questions about water availability

Recommendations

• South East Water's leadership, including CEO David Hinton, should be replaced; the committee has no confidence in the executive team's ability to restore compliance and deliver adequate service
• Non-executive directors should be replaced; the board's continued backing of failing leadership and attempt to block Ofwat's report indicate insufficient oversight and accountability
• Shareholders must intervene to address systematic failures; they bear responsibility as long-term stewards for the company's failure to invest in resilience and infrastructure
• SEW must urgently implement robust monitoring systems for all critical treatment parameters, including real-time controls for coagulant dosing and mandatory jar testing protocols
• SEW must develop and implement a comprehensive crisis communications strategy and ensure incident response plans include stress-testing against plausible scenarios; escalation procedures must clearly define when Gold Team command structures are activated
• SEW must prioritise proactive maintenance across all assets and increase staffing and planning resources to move away from reactive approaches, particularly in the water-stressed eastern region
• SEW must accelerate infrastructure investment to eliminate single points of failure, improve interconnectivity between treatment works, and maintain adequate headroom; the company must contest price review determinations if necessary to fund required resilience projects
• Regulators must monitor compliance with the enforcement order and proposed fine; any further major incidents should trigger consideration of direct regulatory intervention or operator replacement

Key actors

David Hinton (CEO, South East Water), Tanya Sephton (Customer Services Director, South East Water), Dr Marcus Rink (Chief Inspector of Drinking Water, DWI), Caroline Sheridan (Non-Executive Director, SEW), Alistair Carmichael (Chair, EFRA Committee), Ofwat (economic regulator), Drinking Water Inspectorate (DWI), South East Water