Thames Water and other water companies will have to pay customers far more compensation for failures such as fuel leaks, sewer flooding or low water pressure.
The Government has confirmed that new and increased compensation will be compulsory for water companies to pay customers and businesses, the Department for Environment, Food and Rural Affairs (Defra) said.
Issues like low water pressure could see payments jump from £25 up to £250, while payments for internal flooding from sewers could rise to £2,000 or more, compared to £1,000 under current rules.
Following a historic fuel leak from a petrol station in May some 600 properties in Bramley, Sussex, were handed a ‘Do Not Drink’ notice and a £30 voluntary payment from Thames Water.
But under the new rules, the water company would have to pay households £220 and hand businesses £440 each.
Elsewhere when a burst water main interrupted the water supply in South Staffordshire last month, residents were not required to have compensation.
But under the new rules, residents would receive a £150 payment and businesses would receive £300.
There was also no requirement for residents in Brixham, Devon, to be compensated following an outbreak of cryptosporidium, a parasite that can cause diarrhoea and vomiting, during a recent incident.
Now customers could be entitled to £10 per 24 hours, potentially leading to more than £500 for residents over eight weeks for similar cases.
The changes are expected to come into force next year.
Earlier this year water companies were ordered to return £158 million to customers through lower bills next year after delivering “disappointing results” on tackling key failings such as sewage pollution.
Thames Water, the UK’s biggest water supplier, moved up a category from “lagging” to “average” as it met six of its performance commitments and improved on leakage and water supply interruptions. But it still had to return £56.8 million to customers, more than any other supplier.
Last month Thames Water said as many as 12,000 people were left without water after Storm Ciaran caused a major incident in Surrey, leading to more than a dozen schools having to close.
Some water companies voluntarily offer compensation to customers who experience interruptions to their supply or other problems, but there is no statutory requirement to do so and rates can vary significantly among firms and locations.
Payment rates for water service standards have remained unchanged since 2000 and it is hoped that the changes will provide far greater incentives for water companies to get things right the first time.
The list of circumstances that can trigger compensation will also be extended to include situations when Boil Notices are issued by water companies when drinking water quality standards drop, or when firms fail to conduct meter readings or installations on time.
Secretary of State for Environment, Food and Rural Affairs, Steve Reed, said: “Customers have too often been let down by water companies, with supply cut off, low water pressure and in some cases even contaminated tap water.
Mike Keil, chief executive of the Consumer Council for Water (CCW), said: “The current Guaranteed Standards Scheme is not fit for purpose, so we welcome the swift action the Government has taken to bring about long-overdue improvements.
“The increased payment levels when things go wrong, alongside fewer reasons for companies to avoid making payments, means that there are far greater incentives for water companies to get things right first time. The overhaul of these standards marks a step forward in improving consumer protection and repairing fractured trust in the water sector.”
needed to clean up our waterways, speed up infrastructure delivery and restore public confidence in the sector.
“We are clear that the public deserves better compensation when things go wrong, so I’m taking action to make sure that happens.“This is another step forward in our plans to reforms the water sector so it serves customers and the environment better.”
