Consumers in England and Wales will see the amount of compensation they receive for poor customer service from their water supplier at least double under new government measures to crack down on failing utilities companies.
Setting out tough new rules to support households and businesses, the government said minimum compensation payments would be doubled for highly disruptive incidents, including when the water supply is interrupted, or when appointments with customers are missed.
This will mean payments for failing to restore a household’s water supply, which are typically £20, plus £10 for every extra 24 hours, will rise to £50, and an additional £50 per every 12 hours.
More serious problems, such as low pressure, could result in payments of up to £250, while instances of internal flooding from sewers could rise to £2,000.
The plans will also lead to an expansion of the number of incidents that can trigger compensation payments. Water companies will now face charges if they have to issue “boil notices” when water standards drop or when meter readings or installations are delayed.
The new rules, which are now subject to an eight-week consultation, come after a series of high-profile problems with the UK’s largest water suppliers in the past year, including incidents leaving households without drinkable water for days.
In May, about 16,000 households and businesses in Devon were told for several days that they could not use their tap water without boiling it after small traces of cryptosporidium, a parasite that can cause a diarrhoea-type disease, was found in the water supply.
This was followed later that month by an incident in Bramley, Surrey, in which more than 600 households were told not to drink their tap water after Thames Water found “a possible deterioration in quality” in some areas.
Steve Reed, the environment secretary, said the water industry was “broken” and that the new steps were being brought in after years of households and businesses being let down by water companies.
He said: “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.”
Customer service standards for water companies are set out in the guaranteed standards scheme, and the rates of compensation have not changed since 2000.
The changes come alongside wider reforms set out by the government that aim to cut the number of sewage spills by making water bosses criminally liable for severe failures. The industry regulator for England and Wales, Ofwat, will also be given powers to ban bonus payments at companies if environmental standards are not met.
The government will also introduce a new code of conduct for bosses and new consumer panels that will allow customers to summon water industry board members, enabling them to hold executives to account.
Jenny Suggate, the director of policy, research and campaigns at the Consumer Council for Water, said: “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.”
