South East Water: Disruption of Supply

Lord Bassam of Brighton Excerpts

Monday 8th June 2026 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

That is a very good question. Obviously, we have not built a new reservoir for more than 30 years. That is one reason why we have reduced domestic capacity, as the noble Lord knows. We need to just get on with this as best we can. We are trying to get a co-ordinated system-wide approach to it. Havant Thicket is the first new reservoir, so we are using that as a live learning opportunity for the Government, regulators and the water companies, because we all need to work together if we are going to do this. A reservoir senior sponsorship group was established by the Water Delivery Taskforce, designed to both identify and resolve any barriers that we have in delivering a new reservoir. There has been talk of reservoirs for years, so we need to work out why it is not happening so that we can crack on and make it happen.

[Lord Bassam of Brighton (Lab)]

The South East Water company is something of a joke. If I lived in Tunbridge Wells, I would be “Angry of Tunbridge Wells”. The failures in supply in parts of Kent over the last two or three years have been quite profound. What measures can we take to make sure that the company improves its performance? Is there a case for it being taken into some form of control by the state?

[Baroness Hayman of Ullock (Lab)]

I am sure the noble Lord is aware that the chair and CEO of South East Water have resigned following calls from Defra Ministers. My colleague Minister Hardy met the company twice at the end of last month and wanted to understand better what it was doing about compensation plans, but also a proper action plan for this summer. South East Water has also been held to account through the Water Delivery Taskforce to scrutinise its infrastructure delivery. Obviously, we are also aware that Ofwat has fined it, but there is no point fining water companies if it does not fundamentally change their behaviour, so we need to go further.

Ofwat is looking at what to do about that. A licence investigation from Ofwat is going on because of South East Water’s repeated supply failures, and the Drinking Water Inspectorate is investigating the company. Ofwat has also opened enforcement action because South East Water is no longer complying with its investment-grade rating, as Moody’s obviously downgraded it. A lot is happening here but, fundamentally, we need to totally reform the water system so that this does not keep happening in the future.