Customers could be legally entitled to higher compensation rates from water companies – and for a wider range of circumstances – as part of a Government consultation to help fix the “broken industry”.
The proposals seek to double the amount of compensation that customers are entitled to when basic water services are hit.
But households could receive more than double the payments for certain “highly disruptive incidents”, such as failing to provide notice of supply interruptions and missed arranged appointments with customers.
Currently, under the Guaranteed Standards Scheme (GSS), which last set payment rates in 2000, customers and businesses are entitled to between £10 and £50 for each breach (see the table under ‘Background’ for the values and standards).
However, under the proposals by Steve Reed, the Secretary of State for Environment, Food and Rural Affairs, the guarantee would also apply to a broader set of standards that would warrant compensation for customers in England.
This includes automatic payments for ‘boil notices’ when drinking water standards drop, or when water companies fail to conduct meter readings or installations as promised.
A boil notice means you must boil your water before you drink it, cook with it, or brush your teeth with it. The changes would mean that recent outages in Brixham and Bramley earlier this year would have automatically led to compensation for all customers, where there was no entitlement before.
As an example, based on an average annual water and sewerage bill of £440, customers could see a minimum payment of at least £40 under all proposals, which would represent around 10% of the average annual customer bill, with several higher payments worth at least a quarter. An issue like low pressure could see payments of up to £250 and payments for internal flooding from sewers of up to £2,000.
The Government said today’s proposals, subject to an eight-week consultation ending on 7 October, “significantly increase reimbursement” to reflect the need to uprate payments in line with inflation and “recognise the significant impacts of recent water supply disruptions on communities like those seen recently in Hastings, Brixham and Bramley”.
It added “this will put fair and transparent customer service at the heart of water company dealings when basic services are compromised”.
‘Clean up the water industry’
Reed said: “Our water industry is broken. After years of failure, households and businesses have been let down by water companies time and time again.
“The new Government will clean up the water industry and turn the tide on the destruction of our waterways, ensuring water companies protect the interests of their customers and the environment.”
Jenny Suggate, director of policy, research and campaigns at the Consumer Council for Water, which is the statutory representative body in the water sector, said: “We’re delighted the Government is fast-tracking efforts to improve the Guaranteed Standards Scheme, with the potential to boost compensation and support for hundreds of thousands of people each year when they are let down by their water company.
“Given that there has been little change to the standards since they were first introduced, an overhaul is long overdue, and we know it is a pressing priority for household and business customers.
“Demanding higher standards of service and improving levels of compensation when things go wrong will incentivise water companies to get things right the first time for all customers.”
This consultation follows the Government announcing its Water (Special Measures) Bill to cut sewage spills and attract investment to upgrade infrastructure. This includes:
- Strengthening regulation to ensure water bosses face personal criminal liability for lawbreaking.
- Giving the water regulator new powers to ban the payment of bonuses if environmental standards are not met.
- Boosting accountability for water executives through a new ‘code of conduct’ for water companies, so customers can summon board members and hold executives to account.
- Introducing new powers to bring automatic and severe fines.
- And requiring water companies to install real-time monitors at every sewage outlet, with data independently scrutinised by the water regulators.
Related: Water bills to rise by £100 over the next five years
