MPs invite South East to ‘correct the record’ after Tunbridge hearing with DWI

(by Karma Loveday and Verity Mitchell)

The Environment, Food and Rural Affairs Committee has invited South East Water (SEW) to “correct the formal record” after serious inconsistencies were aired in the accounts provided by the company and the Drinking Water Inspectorate (DWI) at a hearing last week about the pre-Christmas Tunbridge Wells outage affecting around 24,000 customers.

In a letter from Committee chair Alistair Carmichael to SEW chair Chris Train, the former raised “significant concerns” about the company’s evidence on 6 January. Carmichael summarised that SEW’s evidence was that the incident was not easily anticipated, with a change in raw water at Pembury treatment works leading to an “unexpected failure of the coagulant process”. Further, that this may have been caused by low water levels following the summer drought.

Carmichael then recounted the thrust of the DWI evidence, which contradicted this account. Chief inspector Marcus Rink told the Committee the event “should not have been a surprise” and that there was nothing wrong with the source water. Rather, he highlighted a series of failures which should have prevented the incident. Carmichael summarised these as follows: 

• “A failure to carry out sufficient tests to understand the effectiveness of the coagulants in treating the raw water. Had this been done, Mr Rink concluded that original treatment methods could have worked.

• Since at least the 9th of November, ‘clear evidence’ of poor filter performance, inadequate filter washing, old and undersized filters, inadequate coagulation management and reduced backwash capacity.

• A ‘reliance on manual interventions, and a lack of online performance visibility to enable a critical assessment and response’, meaning that the company was ‘flying blind.’

• Unavailable scientists to monitor the issues at the treatment works and a site manned only Monday to Friday during the day, with no control room to oversee it.

• Poor risk assessments, and a culture of ‘risk normalisation’.”

Carmichael added that “several of these concerns had been highlighted to the company in previous years, but no action had been taken” and that "Mr Rink also had serious concerns about the transparency and engagement of SEW with both the DWI and the Committee.”

The Committee told Train: “Any act which may prevent or hinder the work of either House of Parliament, including misleading MPs, can amount to a Contempt of the House. To avoid such a contempt and its associated proceedings, any witness who considers the evidence they have given to have been inaccurate should take steps to correct the formal record at their earliest convenience.” A deadline of 5pm today (Monday 12 January) was set. 

Further outages

SEW’s troubles were compounded by reports of a second, short-term outage in Tunbridge Wells last week after mains burst in the cold.

Over this weekend, according to BBC and local news reports, tens of thousands of homes across various parts the south east have been affected by no or low pressure supplies, including in East Grinstead, Eastbourne, and various parts of Kent. A number of causes were cited in the reports including cold weather, Storm Goretti, network issues and shortfalls in bulk supplies from other water companies. The situation in East Grinstead was aggravated by complaints about the initial location of the bottled water distribution point; this was subsequently relocated to prevent town  gridlock. 

Financial performance

SEW management shared that it expects the Tunbridge Wells incident to have a significant impact on the company’s financial performance for the year ending 31 March 2026, which will be reported in the Annual Report in July 2026.

Its interim results reflected the new price control, with revenue rising 22% to £182.8m. Operating profit for the six months was £51.1m, up 38%. The company invested £84.8m of capex, up 14%. 

This spend was underpinned by new capital: £200m of new share capital was injected in May 2025, following the £75m deployed in December 2024.

South East Water’s credit rating at 30 September 2025 was BBB- (Negative Outlook) with S&P and Baa3 (Stable Outlook) with Moody’s. Management is forecasting that net debt/RCV will be 65.8% by March 2026. This is a significant improvement from the 77.8% at March 2024, before the new equity was raised. The company did not declare a dividend.

Aside from the Tunbridge Wells outage, the interim results reported wider struggles with water supply in the summer’s drought which required water restrictions, water redeployment and water pressure reduction. Expenditure on contractors increased by 30%. 

Price appeal

South East Water’s final determination for AMP8 was one of the least generous relative to the company’s totex proposals – a shortfall of 13%. The Competition and Market Authority’s (CMA) redetermination was also deemed insufficient by management, despite the proposed £39m uplift. A shortfall of £90m remains compared to its redetermination request. Management said it wants to see the CMA engage with the company’s actual cost submission over the ‘full historical modelling period’ rather than the CMA’s shorter benchmarking period.

South East Water has set up a ‘Change Project Management Office’ and has hired 278 new staff to deliver its AMP8 targets.