Ofwat has proposed a £22.46 million fine for South East Water following an investigation into multiple supply disruptions between 2020 and 2023, which affected more than 286,000 people in Kent and Sussex.

The regulator’s investigation found that the company had failed to maintain supply system resilience to minimise incidents occurring and failed to plan to ensure it had sufficient headroom during high demand periods.

Ofwat found that the company had failed to plan sufficiently, learn from incidents and conduct root cause analysis to maintain resilience within its water supply system, and was therefore unable to cope during periods of high demand or extreme weather.

The company also failed to maintain key infrastructure such as service reservoirs, boreholes and major pipes.

The proposed £22.46 million fine is 8% of the company’s turnover.and reflects the severity of the issues, the company’s mismanagement and the impact this had on customers. Ofwat can impose a financial penalty on the company of up to 10% of relevant turnover. The proposed £22.46 million fine

"All of these issues left the system more likely to fail during prolonged dry periods or freeze thaw events as we have seen in Kent and Sussex on multiple occasions" Ofwat says.

As a result of the disruptions, customers had no tap water, were unable to shower or bathe, and unable to flush their toilets, which caused immense stress and anxiety.

Ofwat’s investigation found that the company’s response was slow and disorganised, with shortages of bottled water and not enough tankers or support for vulnerable customers. It also failed to learn lessons from previous incidents, including the Beast from the East in 2018.

In Ofwat’s view, South East Water has not taken ownership of these issues and as a result, supply interruptions are still happening too often. The proposed enforcement order sets out the steps Ofwat expects the company to take, including senior management responsibility to fix the problems to prevent them from happening again.

A consultation will now open on the proposal for the public and stakeholders to provide feedback before Ofwat confirms its final decision. The consultation will be open until 13 April 2026.

Chris Walters, interim CEO, at Ofwat said:

“South East Water’s significant failings caused major disruption and had a huge impact on thousands of its customers. Not only did the company fail in its duty to provide a water supply to meet the demands of its customers, but it also fell short when it came to providing support for customers who lost their supply. They must do better.

“This investigation gets to the heart of the company’s supply resilience problems. We want to see South East Water take more responsibility and get on with fixing things for its customers.”

In January Ofwat launched a new, separate investigation into South East Water, following major supply interruptions in November and December 2025, and January 2026. This investigation will determine whether the company complied with its customer-focused licence condition, which requires companies to provide a high level of support to customers when issues arise. This licence condition was introduced in February 2024.

Ofwat and the Drinking Water Inspectorate (DWI) have worked closely to secure compliance with their respective powers. In particular, Ofwat has considered the enforcement actions already issued by DWI as a result of its investigations.

Ofwat undertook incident research into the June 2023 outage. This was published in November 2023.

In considering this case, Ofwat has taken into account the enforcement actions on the Security and Emergency Measures Direction already issued by DWI.

Click here to access the detailed 236 page consultation paper. Deadline for customers and stakeholders to submit responses is 13 April 2026. 

Representations should clearly state which investigation(s) they relate to and be sent to the following address: mailto: This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; or by post to: Ofwat, Centre City Tower, 7 Hill Street, Birmingham, B5 4UA.

Following this, Ofwat will consider the representations made and make a final decision on the fine to be imposed.

High Court rejects South East Water's claim for judicial review to prevent publication of Ofwat proposals

On 18 February 2026, officials from Ofwat spoke to some of the water company’s senior staff and told them that they would shortly be publishing a proposed decision and that they would be proposing to impose a penalty. On 19 February, a draft proposed decision was provided to South East Water for a confidentiality review.

On 24 February, South East Water filed a claim for judicial review, challenging Ofwat’s decisions to propose an enforcement order and financial penalty and to publish notice of the proposals. They also applied for an interim injunction to prevent publication of the proposals pending determination of the claim.

On 26 February, Mr Justice Chamberlain in the King’s Bench Division of the High Court, directed that the application for interim relief should be considered at a hearing on 3^rd March. Following the hearing the High Court, published the judge’s decision to refuse the application for an interim order restraining Ofwat from publishing the proposed decision.

Mike Keil, Chief Executive of the Consumer Council for Water (CCW), commented:

"Ofwat’s long-awaited investigation highlights what too many South East Water customers already know through bitter experience - that their water supply is simply not resilient enough. People across Kent and Sussex will rightly want to know whether this fine will make any difference to the reliability of the services they receive from the company. Customers are fed up of living with the worry and uncertainty of not knowing whether their taps will run dry every time there is a change in the weather.

"South East Water's failed attempts to stall this announcement risks inflicting further damage to customers' trust in the company and gives the impression its entire focus is not on improving the reliability of its water supply."

Click here to read the final judgement by Mr Justice Chamberlain in full