In a further crackdown on under-fire water suppliers, new rules have kicked in that should provide faster payouts to customers when firms fail to deliver
Water customers will automatically get compensation of up to £2,000 under new rules that have come into force in England.
Pay-outs for anything from missed appointments or low water pressure through to severe flooding have been hiked as much as ten-fold. And whereas before those impacted needed to ask for the money, from now on no action will be needed, with eligible customers automatically having the funds credited back to their accounts. 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 supplies following an interruption, responding to written complaints and managing the risk of sewer flooding.
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.”
Officials are working with water companies to expand the list of circumstances that will trigger compensation payments. For now, the automatic compensation for an appointment not being made properly will double from £20 to £40, while for suppliers failing to turn up for an appointment it will jump from £20 to £50.
If account queries aren’t sorted quickly then customers could get £40 – up from £20 – while it is the same if suppliers drag their heels when being asked to change payment arrangements. On time can vary by customer but had to be no more than eight weeks. Where customers aren’t given at least 48 hours notice of a planned supply interruption lasting more than four hours, compensation will rise to £50 for households and £100 for businesses.
And households suffering consistently low water pressure will be automatically eligible to receive up to £250 – a huge uplift from the previous compensation rate of just £25. At the top end, severe issues such as flooding will see customer compensation double from £1,000 to up to £2,000. From October 1, the triggers for compensation will also be expanded. For example, water companies must read a customer’s meter (excluding smart meters) at least once every 13 months. Failure to do so will mean a £40 payout. There are also payments if suppliers fail to install a water meter when requested, subject to some exceptions.
Mike Keil, chief executive of customer watchdog 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 regulator 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.”
Water Minister Emma Hardy
Our daily lives are punctuated by the flow of water coming out of our taps: tea breaks, bath time with our children, washing our hands. No one should have to worry about the quality or reliability of their water supply – but this is too often the case.
Customers rightly expect value for money and good service for their utilities. It’s no different when it comes to water. As Water Minister, I hear of people continually let down by water companies that leave serious complaints unanswered or miss appointments.
At no time was this service failure more stark than last year, when the residents of Brixham, Devon went weeks without clean drinking water. The direct impact it had on people’s health was immense, not to mention the disruption it caused to homes, schools and hospitals. I am clear this should not have happened, and cannot happen again, in any part of the country.
Households must be sufficiently compensated when issues to their water supply arise – and that compensation must be paid for by their water company, not out of customer bills. That is why, from today, water companies will be forced to at least double the amount they pay back to customers when their service has failed, with many compensation rates going even further. This comes as part of our Plan for Change – we are acting to put money back into the pockets of hard working people as we work to deliver sustained growth and raise living standards across the UK.
Through our improved Guaranteed Service Scheme, if you suffer continued low water pressure, you will now automatically be entitled to £250 – a tenfold increase on the previous £25. When appointments are not kept and account issues not resolved on time, customers will now be paid up to £50.
When it comes to severe incidents like internal flooding from sewers, I recognise the impact this can have on day-to-day life and personal finances, which is why under the improved scheme, victims will receive up to £2,000 in compensation – a tenfold increase on what was available previously. Full responsibility for these payments will fall to the companies at fault. There will be no lengthy claim back processes as the money will automatically go back into eligible customers’ pockets.
In our first week in government, we promised to hold water companies to account when they fail in their duties to customers. By raising compensation payments to the highest level in history, we are delivering on that promise. This is another step in the government’s mission to turn the tide on the failing water industry, putting people at the heart of company decisions and actions, and ensuring they deliver the services that we all pay for.