Firms may have to compensate customers for hosepipe bans as well as outages

Customers subject to hosepipe bans could become eligible for compensation from their water company.

Ofwat announced last week that its review into minimum compensation arrangements for customers left off supply – which it announced in the wake of the Beast from the East incident – would also consider the pros and cons of expanding the payout scheme to cover supply restrictions.

It called for evidence on both matters. At present, Ofwat said households are entitled to £20 if they are without water for a day and an extra £10 for each 24 hours on top of that. In its Out in the Cold report on the February/March freeze thaw outages, published in June, it argued these compensation arrangements, set out in the Guaranteed Standards Scheme, were “not reflective of the impact on customers unable to access to water. As a result, the regulator will work with the UK and Welsh Governments to consider changes to the rules on compensation.”

Commenting on the review, Ofwat chief executive Rachel Fletcher said: “We know that customers rely on water like no other service and customers have told us of the profound impact it has on them, their families and their work when they do not have access to water. The current compensation arrangements do not reflect the impact on customers of not having water and so we are seeking evidence to help find the right level of compensation. Equally important as setting the right level is making sure that when customers are due some compensation, access to it is fair, fast and free from hassle.”

Once Ofwat has reviewed the evidence, it will develop plans and submit recommendations to the UK and Welsh governments by the end of the year.