Compensation for boil notices among new water company rules announced by environment secretary | Business News

More compensation, possible refunds and new customer panels have been announced as part of the government’s “initial steps” to end what it describes as the crisis in the water sector.

Steve Reed, the environment secretary, said he will meet with water bosses and communicate a tougher stance on customer performance and sewage leaks that plagued the industry, in an announcement confirming Sky News reports.

Four renovation announcements

A reform program will be presented to the gathered companies:

• Water companies will have to pay more money more often. Compensation will be paid in expanded circumstances, such as when boil water warnings are issued. Consultation on increasing remuneration in the event of failure will take place, with Mr Reed seeking to more than double compensation.

• For the first time in UK history, customers will be given new powers to hold companies to account through “customer panels” – groups that can convene board members and hold utility executives to account.

• Companies are expected to change the rules that govern them – their statutes – to make customers and the environment their main objective.

• Mr Reed called on water regulator Ofwat to limit funding for infrastructure to ensure it is only spent on improvements for customers and the environment. If any of those funds go unspent, customers should be reimbursed, Reed said, and that money should never be part of bonuses, shareholder payments or salary increases.

Reed will also tell industry figures that he plans to work with the sector and its investors – which include the UK’s biggest pension fund – to attract more investment, end pollution and create jobs.

What went wrong?

Despite companies’ efforts to limit pollution, persistent industry-wide sewage leaks have polluted waterways across the UK, damaging some bathing areas, causing disease and killing fish.

Financial difficulties at the UK’s largest supplier Thames Water meant that the government was drawing up contingency measures plans for its collapse last summer. On Tuesday, Thames Water said it would Run out of money until May 2025, if no new investments were obtained.

Also cash-strapped is South East Water, which supplies around 2.3 million customers and said on Wednesday it needed more money from investors to stay afloat.

What’s next?

Ofwat will announce its assessment of proposed fundraising and spending plans for the water industry on Thursday.

The government is also expected to outline new measures to reform the sector.

Reed said “this unacceptable destruction” should never have been allowed and “can never happen again.”

The Labor manifesto said the party would subject struggling water companies to so-called special measures, a form of government control, to clean up seas, lakes and rivers.