South East Water Pembury failure cost £30m

(by Verity Mitchell)

The chief executive of South East Water, David Hinton, has revealed that the outage at its Pembury plant, which caused extended supply outages in Tunbridge Wells in November/December, cost the company around £30m. He was addressing customers at a Consumer Council for Water meeting in early February. He also shared that, had the company installed a backup form of water coagulation on site at a cost of around £20,000, the issue would likely not have happened.

During the discussions, Hinton was asked why his account of the reasons for the outage differed from those of the Drinking Water Inspectorate (DWI). The South East Water position is that the precise nature of the event was complex and not foreseeable.

The DWI position — as shared by Marcus Rink, the chief drinking water inspector, to the Environment, Food and Rural Affairs Committee in January — was that it had warned South East Water that the Pembury works had been operating sub-optimally for weeks and months prior to the event. Rink blamed "reliance on manual interventions, and a lack of online performance visibility to enable a critical assessment and response”. He continued: “They were flying blind. There was no electronic collection of data on coagulation. It was fixed manual dosing, which meant that if the flow of water changed, the dosing remained the same and the concentration changed.”

From 19 November, the operation of the plant started to deteriorate. Rink referred to South East Water’s defence: "You heard about trying to get a new coagulant. The opinion of my inspectors is that, had they done the appropriate jar testing (as recommended by the DWI) and had the appropriate data, the original coagulant chemical would have worked.”

DWI went on: "The ability to oversee the site is lacking. There is no systems control telemetry associated with the coagulation... The site is only manned Monday to Friday during the day, so the site could go wrong overnight and there would be nobody there — and there is no control room that can see that. We recommended in previous audits that the company should have control of it. We recommended after 2022, 2023 and 2018 that the company should have a response system that takes in the learning."

When the plant failed, Hinton admitted that communication with customers reflected uncertainty about the remedy. "Suffice to say, we weren't clear at the outset what the remedy was going to be. So, we were trying things.” After several updates he admitted that the problem "ended up being more complex than we thought.” 

No internal audit function

South East Water has also been criticised by Anne Kiem, the chief executive of the Chartered Institute of Internal Auditors (CIIA), for a lack of internal audit function. She said: "It is deeply troubling that nearly two years after we first flagged issues, South East Water continues to operate without internal audit... and is now experiencing the sort of failures robust internal audit can help prevent.”

In response, South East Water said it commissioned “a number of internal audits each year which are undertaken by an outsourced internal audit provider...These reports are reviewed by the audit and risk committee, which is chaired by an independent non-executive director.”

According to the CIIA, Ofwat does not require an internal audit function for water companies in England and Wales. This contrasts with the regimes in place for Scottish Water and Northern Ireland Water.

South East Water said, in its interim report to 30 September 2025, that it was embracing change: "We have set up a change project management office within the technology and insight directorate to help us deliver our corporate plan.” It also has a new HR system and customer communications platform.