Burst Pipe Replacement ‘Wasn’t Necessary’
HUGH SULLIVAN
HIP recently reported that in 2007 Southern Water obtained planning permission from Rother District Council to replace the mains supply pipeline on the basis that it was “outworn”. Eight years later, in 2015, the company had taken no action, but informed Rother in a letter that it intended to “progress” a revised replacement scheme as the existing pipeline was “approaching the end of its operational life”.
In fact, Southern Water never applied to the regulator, Ofwat, for approval of a scheme to re-lay an alternative pipe. Questioned about this, a company spokesperson said: “On review, it was not necessary to do so, due to the pressure being reduced in the pipe instead…These decisions are made regularly by utility companies”.
By 2023, Southern Water had changed its tune, submitting a record £7.8bn business plan to Ofwat to deliver: “Major improvements in water resilience, wastewater treatment, and customer service, as well as enhancement and protection of our precious environment.” The company describes its desired programme as the “greatest ever single investment in the environment”, representing over £3,500 expenditure per household and creating an estimated 5,000 jobs across the region. It further claims that shareholders have invested £1.6bn since 2021, whilst having received no dividend since 2017. But is also reported as seeking the highest percentage increase in water bills by any water company in England and Wales – 91% over the next five years.
Southern Water’s chief customer officer, Katy Taylor, said last week:
“We share everyone’s concerns about rising payments in the face of a cost-of-living crisis. We have been able to keep bills low, with the average combined water and wastewater bill increasing by only £2 in the past 10 years in nominal terms. We agree with our customers that we must now charge more so we can bring our bills in line with inflation, rising costs and, more importantly, so we can invest more to meet the expectations of our customers, and protect and enhance our environment.” She went on to stress that discounts would be extended to needy households. “For those that need support, we already provide a 45% bill discount to over 120,000 customers today and estimate that number will rise to around 200,000 by 2030.”
Southern Water’s five-year investment programme and its proposals to increase customer charges were submitted to Ofwat last October, alongside those of other water companies. The regulator is tasked with ensuring they meet the twin targets of making environmental improvements while also delivering value for money for consumers.
Ofwat’s “draft determination” was due on 12 June but has been delayed until after the general election on 4 July – an indication of the potential political impact. Assessment of Southern Water’s needs may in any event have been revised following the bursting of the mains water pipeline from Darwell and consequent cut-off of supply to Hastings and St Leonards at the beginning of last month.
A Defra (Department for the Environment, Food and Rural Affairs) spokesperson said last week: “Investment in the water industry has not kept pace with where it needs to be. This needs to change, and we want to see ambitious plans from water companies that meet our targets and deliver for customers… This process will resume post-election to ensure customers do not pay for water companies’ poor performance.”
£1m Goodwill Pay-out Won’t Reach Home Customers
Southern Water has announced a £1million ‘goodwill fund’ to compensate businesses and community groups in Hastings which suffered the double whammy of flooding and loss of water supply over the past 16 months.
But, although the company acknowledged the twin calamities also took their toll on residential households, no compensation is being offered to them. While there is a statutory scheme that seems, at first sight, to require a £30 compensation payment to be made to each household for every 12 hours of water loss, a burst of a strategic water main is an event beyond the remit of the relevant regulations, according to the company spokesperson. The company insists that the offer to businesses and community groups is a goodwill gesture, not a legal requirement.
At the first full meeting since last month’s election, Hastings Borough Council leader Julia Hilton said: “All councillors reacted with anger and dismay at the news that Southern Water are not intending to compensate individual residents for the loss of water over the Bank Holiday period…We need to put pressure on [the company] to ensure that the households that most deserve compensation are directly reimbursed.” She did not elaborate on how this would be achieved. Meanwhile, ‘goodwill’ money is being allocated as follows:
- £500,000 for community
- projects
- £380,000 to support businesses
- £120,000 for “local festivals and events”
Tim McMahon, Southern Water’s Director of Water, who led the company’s response to the burst major water main earlier this month, said: “We recognise that the services we provide have not met all of the expectations of our customers in St Leonards and Hastings in recent months – and we are very sorry… We accept that we need to put things right so far as the community and businesses in Hastings and St Leonards are concerned, and therefore want to give something back as a meaningful goodwill gesture.”
A spokesperson for the company said last week that eligible businesses are being contacted directly. Some of the worst affected hospitality firms (about 15% of the total) will receive £1,500 each; the rest are being paid £150 each.
The company was “still in discussion” with Hastings Borough Council about setting up or working with a community foundation which would make allocations to community groups. The “local festivals and events” would include the Jack-in-the-Green charity and local education providers.
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