The thaw that followed the 'Beast from the East' – the name given to the period of cold weather in late February and early March 2018 – left over 200,000 customers in England and Wales without water for more than four hours; and over 60,000 customers without supply for more than 12 hours. Some were without water for a week.
Staff in all companies worked hard in challenging circumstances to get customers reconnected. But there were real differences in the performance of water companies across England and Wales. Some companies did well to protect their customers from the impact of the weather. We also found significant problems and there are lessons to be learned for all companies – even those that performed well.
These are the main findings of our review.
Planning and preparation
Companies' performance was not directly linked to the severity of the weather.
The previous freeze and thaw incident in 2010-11 was more severe for many companies. The impact on customers in this year’s incident depended to a large extent on factors within the companies’ control, such as the quality of their plans for handling major incidents.
Some companies, such as Severn Trent Water and Thames Water, did not have appropriate plans in place for this type of incident.
There were a large number of small bursts on customer premises (up to 70% to 85% of the total in extreme cases) that were not anticipated and showed the limits of companies’ plans for this type of incident. This dispersed pattern of small bursts, combined with a lack of additional production availability, created major supply problems that were not picked up early enough by some companies. This indicates that detailed real time data on issues within their networks is lacking. This also hampered the identification of problems, efficient response and effective escalation of the emerging impacts within companies. As these companies had to design and deliver a response as it happened, they were slower and less effective than companies that already had robust plans in place and had better network data.
Better performing companies, such as Northumbrian Water, United Utilities, Wessex Water and Yorkshire Water, used real time information and monitoring systems to identify and manage the issues.
They demonstrated resilience in their systems to increase production and move water to where it was most needed. They had effective governance processes with clear escalation routes through the company and key external stakeholders.
Co-ordination between companies that were seriously impacted was poor.
For example, the provision of alternative supplies to customers, particularly bottled water, was hampered by multiple companies calling on the same suppliers at the same time, which then struggled to meet the large and sudden increase in demand. This was a particular problem for South East Water and Southern Water. Distribution points were limited and poorly planned – many customers, particularly those in vulnerable circumstances, did not receive support. As a result, councils and voluntary groups had to step in.
Some companies, such as South West Water, were more active in helping to address bursts on customer premises, enabling them to better manage supply across their networks.
Communication with customers and key stakeholders
There were many examples of companies not communicating effectively with customers and stakeholders.
Research by the Consumer Council for Water (CCWater) in seven of the worst affected areas indicates that 40% of customers impacted received no communication from their water company during the incident. Communications were often not targeted, timely, clear or helpful, reflecting a lack of accurate customer data. Many customers could not get through to company call centres. Some companies had an overreliance on a few digital channels (such as Twitter) to provide updates, but these did not reach a large proportion of customers. Information online was often inaccurate or lacked detail about where problems were occurring and when they would be fixed. This appears to reflect a lack of accurate network data. Poor communication between wholesalers and retailers in the business market left some business customers confused about who they should talk to.
Where we saw better performance, companies communicated effectively with customers and key stakeholders, such as local resilience forums, councils and the emergency services, before, during and after the incident to ensure that they were able to prepare and to minimise the impact of disruption.
Companies that performed badly, such as Southern Water and Thames Water, did not proactively communicate with these key stakeholders in advance and as the impact on customers became apparent.
Customers in vulnerable circumstances
There was an inconsistent approach to identifying and supporting customers in vulnerable circumstances.
Better performing companies, such as United Utilities, managed the needs of these customers well. Other companies, such as Thames Water, did not have accurate or up-to-date information and data on customers who needed priority help. This meant they could not get in touch or offer tailored support before, during or after the incident.
Some companies, such as South East Water and Thames Water, have proactively gone above statutory minimum payments to customers to reflect the level of disruption experienced and have paid out quickly.
However, there was a large variation between companies in the levels of compensation paid to their customers, and several companies had limited information about which of their customers were impacted. This reflected poor levels of customer and network data.
The main actions from our review
All companies must address the issues identified in our review, their company specific letter and their own internal reviews.
They must take action to ensure that their customers are better protected in the future. In doing this we expect the following:
We expect four companies – Severn Trent Water, South East Water, Southern Water and Thames Water – to publish, by 28 September 2018, an externally assured action plan setting out how they are addressing the issues identified.
We identified these companies as needing detailed scrutiny because we have substantial concerns with their handling of the incident and because of the volume of customers left without supply for more than four hours during the incident period. We expect these companies' Boards to be informed of and to support these plans and for them to be signed off by the company’s Chair and Executive. We will take further action if the issues identified are not addressed.
All other companies should publish a response to the relevant areas of concern highlighted in this review, their company specific letter and their own internal reviews by 28 September 2018. This response should be proportionate to the issues identified.
We expect all companies to work together to improve co-ordination and share best practice in key areas highlighted in this review.
The water company industry body, Water UK, will co-ordinate work across the sector in key areas, including more effective planning for the sourcing and distribution of bottled water supplies and the sharing of best practice on emergency incident response. They have agreed to publish their findings and agreed actions by 28 September 2018.
We are concerned that the current compensation arrangements – the Guaranteed Standards Scheme (GSS) – are not reflective of the impact on customers of being without water for a prolonged period.
We intend to launch a consultation by the end of July 2018 with a view to making proposals to revise the GSS.
Following company responses to this review, we will consider whether we need to make changes to regulations to strengthen or clarify companies’ obligations to provide customers with resilient supplies.