Oral evidence: Reforming the water sector, HC 588

Oral evidence, 6 January 2026.

Witnesses

David Hinton and Tanya Sephton.

Chair

Good morning, everybody. A very happy new year to you all. Welcome to this year’s first evidence session of the Environment, Food and Rural Affairs Committee. We return this morning to our inquiry on reforming the water sector, and we are joined by representatives of South East Water and then of the Drinking Water Inspectorate. Good morning to the panel. You are very welcome; we appreciate your attendance and your co-operation with our inquiry. Can I ask you, for the benefit of those following our proceedings and for our official record, to state your names and occupations?

David Hinton

I am David Hinton, the CEO of South East Water.

Tanya Sephton

Good morning. I am Tanya Sephton, the customer services director at South East Water.

Chair

Good morning. David, you have been chief executive of South East Water, I think, since 2021. What sort of company do you want to run at South East Water? We talk about corporate culture; what is the corporate culture that you want your leadership to create in South East Water?

David Hinton

May I start with an apology to the customers of Tunbridge Wells? I know how really, really inconvenient it is to not have water. It really disrupts everyday life on every level, and I know that it has severely impacted them. I would like to get that apology on record. Also, if I may, I will say a really quick thank you to the resilience forum that helped us out, as well as the local MP, the staff and the supply chain. They really helped us out in that event. The company that I want to run is the company that I do run. It is a really community-based company. It has history in its community. When we talk about some of the resilience challenges later, I will come on to how that community feel comes through and how it is almost inbuilt in our infrastructure. It is lots of small companies that have been put together. Our people live and work in the area. We understand the area. We have 2.3 million customers and just over 1,000 employees, so we are not a big company. We do not do sewerage; we are a water-only company, very much focused on water delivery. The culture of the company is very much about a wholesome, constant water supply, even given the challenges that we have been facing in the south-east recently, in terms of climate change and other things, which I am sure we will come on to. That is the company that I think I do manage, and that I would very much like to continue to manage.

Chair

Do you think that, at the beginning of December, your customers would have recognised that characterisation?

David Hinton

We have not performed as we should, particularly in some areas that are on the ends of our system—in the isolated parts of our system. Let me provide a little bit of context, because I think it may help the Committee as we go through this hearing. I have already mentioned that we are a water-only company. We have 2.3 million customers. We operate in two distinct geographical regions. We call them—

Chair

At the risk of being rude, we appreciate the fullness of the answer, but we are pressed for time, so can we maybe just keep to stuff that we do not already know?

David Hinton

Sure, okay. The resilience issues, and what has been facing us and what has impacted the customers, really started in 2021. We had an uptick in demand following covid. We are a commuter-based area, and a lot of our customers are spending a lot more time at home and there were lifestyle changes. We also had some really extreme weather events over that period, between 2021 and 2025. That has meant that the resilience of these particular areas has been stretched. We have been doing a lot since. Basically, we have lots and lots of small treatment works, which are all community-based. To give you a feel, we have almost the same number of treatment works as Thames Water; on every other measure, it is 10 times our size. We have lots of small treatment works supplying local communities. Tunbridge Wells is a classic example of that. It is reliant on one single source. None of the events that have impacted our customers since 2021 has been asset failure-related. They have been where we have been unable to meet demand with our supply. That kick-up in demand and the kick-up in extreme weather events that we have seen have been stretching our resilience. That has impacted our ability to deliver the service that we really want to deliver.

Chair

To whom do you consider yourself to be accountable? How important is accountability to you?

David Hinton

My ultimate accountability is absolutely to the customer, particularly in terms of water quality—I am sure we will come on to that—but in terms of water supply as well. They are the two top areas of focus, and they have been since I have been in post. Since we saw the resilience changes in 2021, as a business and as an individual, I have been absolutely focused on improving that infrastructure resilience.

Chair

On the question of accountability, your director of water supply was questioned by the BBC on the incident and about your own position. He said that the question was “unhelpful” and “fundamentally misunderstands” the challenges the firm had been facing, “as a company over the last few years and as an industry”. He said the challenges the industry was facing were “far wider than an individual company and individual people”. That does not sound to me like a community-based company that is taking responsibility for its own actions. Who signed off on that as a line of communication?

David Hinton

I think that line was used in answer to a question about whether I should resign. It was in the context of that kind of question. I think the operations director was effectively saying, “That isn’t a relevant question for now.” As I am sure we will talk through, some of the issues are about how we are regulated and how investment is provided. That is what he was alluding to in that answer, and I think he was right to do so. There are bigger, wider questions here that are not just about South East Water. There is some real relevance to some industry learning. We are at the tip of the spear on this, in terms of the pressures that South East Water feels. I can go into that in detail if you wish me to. The south-east of England is particularly hit with climate change impacts. We have had continual growth in housing, forever, and that has meant that demand has got very close to our ability to supply.

Chair

It sounds like you are not really in control of your own business, then.

David Hinton

No, we work in a regulated industry, so it has been an absolute focus of ours to understand how the regulation can help us. I am actually really pleased that the National Infrastructure Commission, as it was, and the Independent Water Commission both recognise that we need asset resilience standards in the future. That is the fundamental point to this issue. The lack of standards has meant that we have been unable to effectively drive and convince the regulator of the investment that we need, and that has meant that we run, in my mind, far too close in terms of what we have in infrastructure.

Chair

To be clear, this incident from 29 November to 12 December was not extreme weather-related, was it?

David Hinton

No, it was not entirely—I can go through the event, but it was fundamentally down to the fact that we have a single source of supply for Tunbridge Wells.

Chair

So you have tolerated a single point of failure.

David Hinton

We do not tolerate; we try to mitigate. Since 2020, we have generated a resilience plan, which we included in our most recent business plan, that had £300 million of resilience investment in it. Part of that resilience investment would have supported, and will support Tunbridge Wells if it is allowed. It will reduce the 22,000 customers reliant on a single source, which we think—I think—is too many.

Chair

Eventually you lifted the boil notice on 12 December. We are three and a half weeks down the road from that. What mark out of 10 would you give yourself and your company for your handling of that incident?

David Hinton

If I could split it into three sections—

Chair

No, give yourself the mark out of 10.

David Hinton

It is hard to give a mark out of 10 because there are lots of different facets to it. The response was by far and away the biggest we have ever done, and the amount of resources we put on it was by far and away the most we have ever put—

Chair

Well, it was probably the biggest failure you have ever had, was it not?

David Hinton

In terms of customers impacted, this was not the biggest impact of the events we have had over the last five years, but it was undoubtedly the largest response because of the investment we put into the response side of it. There are definitely lessons to be learned on the water quality side, which we have already adopted.

Chair

But you are not going to give me a mark out of 10.

David Hinton

It is really hard on a single number.

Chair

Well, you have 10 numbers to choose from.

David Hinton

I would give you three numbers. I would say eight out of 10 in terms of response, six out of 10 in terms of communications, and six out of 10 in terms of the prevention of the event in the first place.

Chair

That would be an A-grade pass, when I was at school, for response, and a B-grade pass for everything else. How bad would it have to be for you to give yourself a failure?

David Hinton

I would categorise that as an event that was caused by something that was very easily anticipated. This one was not.

Chair

Sorry, but you were warned 12 months ago by the Drinking Water Inspectorate about this treatment plant, were you not? But you did not see it as foreseeable.

David Hinton

The issue that caused this event was a change in the raw water chemistry that we had not seen in 20 years. It was not a failure of the asset; it was not a failure of the treatment works per se. It was a change in the water chemistry.

Chair

What was that change?

David Hinton

It was a change in a number of parameters, pH, alkalinity and conductivity, which meant that the coagulant—I could spend a little bit of time describing what actually happened. Is that helpful?

Chair

A little bit of time, if you can. The various accounts that have been put into the public domain since this all started have varied greatly, so if you can give us a final, succinct, definitive cause of the failure, then I think that might be helpful.

David Hinton

Pembury is the treatment works in question. It is a groundwater source, so it takes water from local springs and boreholes. It goes through a relatively simple treatment process. One step is coagulation. That is us adding a chemical, which happens all over the world; it is a well-known water treatment step. That chemical effectively clumps to remove the solids and then that passes for disinfection. The chemical that we have used there for 20 years stopped performing as it should, and that meant disinfection could potentially be compromised. Initially, we did not know that that was the issue; we thought it was the coagulant we were using. That is why it appeared as though the story was changing, because, in our mind, the actual issue was changing as we went through the investigation.

Chair

Mr Hinton, are you not describing what water companies are supposed to do anyway?

David Hinton

I am describing what actually caused this event. It was an unexpected failure of the coagulant process, which we did not initially nail as the issue because the raw water quality had never changed like it had done in this particular event.

Chair

You have had major water outages in 2022, 2023 and three in 2025—the most recent one we are talking about here. What is going wrong at South East Water? Why have you allowed this failure to continue?

David Hinton

This is an infrastructure issue. If I can go back to the two regions, the western and the eastern, for a second, the western region used to be the Mid Southern Water Company. If it was still a company, it would have the best interruptions performance in the industry; the east has one of the poorest. That is a pretty good control to say that what is going on is actually the infrastructure in the east compared with the west.

Chair

Who is responsible for the infrastructure?

David Hinton

I am responsible for getting the infrastructure in the ground and putting the business plan together to get that infrastructure supported. But that happens in price review processes and this all started post the last price review, so I have been very focused in this price review on getting the investment we need, which is why we put in £300 million of investment for resilience as part of the business planning process.

Chair

You have been given multiple warnings by Ofwat and the Drinking Water Inspectorate, but still these failures keep happening. Why is that?

David Hinton

Because the infrastructure needs to be in place.

Chair

Right. And you don’t see that there is any responsibility for yourself in that?

David Hinton

No, and we have absolutely begun that journey. We overspent our last five-year period by over £100 million, because we have begun that journey of effectively putting that infrastructure in place. We have shored up, to use the expression, a number of the areas where the resilience was challenged during these heatwaves—areas in Sussex and others in Kent. We have a plan to shore up Tunbridge Wells, which is effectively an extension to a treatment works at a nearby reservoir at Bewl. We are currently debating with the CMA about the need for that investment, which is really crucial for resilience in the south-east. It is something we have been fighting with the CMA about since we appealed, which is something we have never done before as a business, but we are absolutely committed to getting that resilience expenditure, because that is the solution to this issue. We need more interconnectivity, we need more storage and we need more production output, and Bewl provides us with a lot of those, as do a number of the other schemes included in that £300 million.

Chair

You touched on this earlier, but the local Member of Parliament has called on you to resign. With the benefit of further time for reflection, do you have any thoughts on that?

David Hinton

The way I see it, this is an issue of investment, regulation and climate change, and as an organisation and as an individual, I am absolutely focused on doing this. It has been my strategic focus since 2021. I can hand on heart say that I was pretty instrumental in the infrastructure commission making the recommendations about resilience standards, which in my mind is fundamental. We do not have resilience standards in how you build a water network. In power, if you add houses to the grid, there is an automatic requirement for a new transformer. We do not have any of that in water, which means that, as demand increases and houses grow, it is really difficult to make a case to say, “I need another treatment works,” or, “I need more interconnectivity.” I have been pushing that as an individual, because that is what drives the investment, and it is the investment that will provide the resilience for the customers in Kent and Sussex.

Chair

Your evidence says that you have basically been asked to do an impossible job.

David Hinton

No, it’s happening; we are starting the investment. We have already done, as I say, £100 million of it, and we have got £200 million via the last price review, and that is already going in the ground, but investment takes time, unfortunately. Planning processes take time. We have really focused on our actual response capability, knowing that we are at risk until the investment goes in.

Chair

This comes down to the leadership that you give the company, and this is material to the way it is handled. I asked for your reflections on the local Member of Parliament calling for you to resign, because the evidence we got from him says in a footnote that on the day he called for you to resign, you phoned him in the evening. Is that correct?

David Hinton

Yep.

Chair

He says, “He asked me how I could sleep at night, having ‘politicised the issue’”. Is that correct?

David Hinton

If I can give some context to that conversation—

Chair

Is what I have read to you correct?

David Hinton

I don’t recall the entire—

Chair

Is that what you said to Mr Martin?

David Hinton

I don’t recall the entire conversation. If I can give you some context—

Chair

You don’t need to recall the entire conversation. Is the quotation that I have read to you a faithful representation of part of what you said?

David Hinton

I honestly don’t recall exactly what I said, so I couldn’t precisely say those are the words I actually used. But if I can provide some context for that conversation, Mike Martin and I have met a number of times since he has been in post. We have been to Pembury, and we have talked about our investment plans going forward and what we have done in terms of the response. I had been speaking to Mike in the early part of the incident—a matter of hours, actually, before he made the interview and the request for me to resign. I phoned him because I thought we must have massively dropped the ball; I thought, “What have we possibly—”

Chair

So you don’t think you had done?

David Hinton

No, I mean on something that he had only heard about since the call I had earlier with him, because I had a call with him either the previous evening or that morning—I forget. I phoned him to ask him what that issue was—what had made him change his mind. He said some things to me and then I responded to him; it wasn’t my finest moment. It was a one-to-one conversation and it wasn’t my finest moment. All I am prepared to say is that the things Mike said to me elicited that kind of response, and I think the rest of it was a private conversation.

Chair

Okay. Turning to the financial position of South East Water overall, in 2023, it was reported that South East Water spent more on dividends and servicing debt than on infrastructure and investment. Is that correct?

David Hinton

No. That article was run by the Financial Times, and, as part of a simplification of our financial structure, we transferred a set of moneys from one instrument to another. In the parlance of finance, that is called a special dividend. So while the headline technically is correct, none of that money left and went to shareholders; none of that money left and went outside the business.

Chair

If your finances are too complex to be understood by the Financial Times, are they maybe just too complex?

David Hinton

The article itself actually did reflect that movement of funds. We sought and gained Ofwat’s approval for that removal, because it was a simplification of the structure that we were trying to achieve, at a time when companies’ financial structures were deemed to be too complex. Ours is by no means the most complex, but that £125 million transfer was not a dividend.

Chair

Your base salary last year was £271,620. Is that correct?

David Hinton

The last reported salary was £400,000, for my basic salary.

Chair

Right. So that is your base salary?

David Hinton

Yes.

Chair

And, last year, you were paid £115,000 of bonus. Is that correct?

David Hinton

Yes.

Chair

Would you expect to receive that again next year?

David Hinton

That is not for me to decide; we have an independent remuneration committee that decides on that. There are different elements to the bonus. For example, health and safety is one element, and a whole load of the elements are on water supply, and I do not expect to get a bonus on either of those elements.

Chair

Just to be clear, the Drinking Water Inspectorate last year urged the company to deliver urgent upgrades to Pembury to avoid contamination of E. coli and clostridium, because that could pose a danger to human health.

David Hinton

The audit you are referring to had a number of recommendations from the DWI, with a number of dates. We have completed all of the actions by those required dates, as we sit here today. There are some actions due in a year or two’s time, but we are up to speed with all those improvements. Pembury has been refurbished a number of times; it was refurbished between 2005 and 2010, with £8 million spent on it, and we intend to spend another £10 million on Pembury in 2028. That is the kind of cycle that treatment works generally go in.

Chair

We are going to move on to some questioning around the causes of the water outage in Tunbridge Wells; Charlie will lead us into that.

Charlie Dewhirst

Yes, looking more specifically at the Tunbridge Wells incident, the evidence we have received as a Committee suggests there was something of a delay between you being aware of the issue and the council and local resilience forum being informed. Is that a fair assessment?

David Hinton

The point that we knew that customers were going to be impacted in terms of supply was the point at which we did notify. In running a set of infrastructure assets, there are always periods of high and low risk when you have to adapt the network, and we have to make a call about when it is prudent to notify stakeholders that we think an issue might develop. As soon as we knew that customers would be affected, we moved it to that stage.

Charlie Dewhirst

Did you attempt to fix the issue before that point and before you went further?

David Hinton

Yes.

Charlie Dewhirst

Was that a decision taken at the highest level by yourself, or was it taken further down the organisation?

David Hinton

I can expand slightly on the cause. The coagulant I talked about earlier started to misbehave on Wednesday of that week. That can happen with coagulation, and we change things like pH dose and the amount of coagulant. We were doing that, and it was normal business as usual. On Saturday we realised that everything that we would normally try had not worked. That is when we realised that there would inevitably be an impact on customers. That is when we notified the local resilience forums.

Charlie Dewhirst

There is quite a jump from realising that there is an issue and trying to solve it to a total outage across Tunbridge Wells. That seems quite a sudden escalation. Is that fair?

David Hinton

No, I do not think so. We must make a call about not notifying stakeholders too often and then standing them down and instead only notifying them when we think that there is a fairly certain likelihood. That is a call that we always have to make. In hindsight, I do not think that we made the call at the wrong point. We engaged the locals, and they were informed relatively early because it was over the weekend. We contacted them over the weekend when this actually started to manifest into an event.

Charlie Dewhirst

During that time, did you try and restart the process multiple times?

David Hinton

Yes.

Charlie Dewhirst

And it failed each time and therefore you reached a point where you had to escalate and inform customers?

David Hinton

Exactly.

Charlie Dewhirst

In terms of the previous risk notice, we have already talked about your investment and plans. In hindsight, was there something that you could have done sooner to improve the Pembury site to avoid this incident?

David Hinton

Absolutely—in hindsight the water chemistry at Pembury is groundwater and it is normally very constant, but it changed. We had never seen that in 20 years. In hindsight, I wish we had had the alternative coagulant on site. We tried loads of different chemicals to see if they worked. Those are all used across the industry, and we took industry advice about this really unusual thing that was happening. We took expert advice from process scientists all over the country and everything was pointing to changing the coagulant, which we did over a number of days to try and get it to work. Now, if we had had the alternative on site—which we now do—we could have just flipped it and there would be no impact on customers at all, but we were running with a single coagulant. In hindsight, that is something that we will not do at this site or any others like it.

Charlie Dewhirst

Can you explain to the layman why that change in water quality may have occurred so unexpectedly?

David Hinton

We have one main theory; the groundwater goes into a small, service reservoir, which is pond-sized rather than reservoir-sized. That was at its lowest ever because of the really hot summer and the driest spring since 1850-something. Chemistry changes at different depths, so it could be that we were taking water from the lowest end of the pond where we have never taken it before and that is what changed the water chemistry. We are still doing loads of experiments to see if that was the issue.

Charlie Dewhirst

Pembury remains a single point of failure. Can you assure the Committee that there was no other alternative that could have been used at that point? Was there not any other interconnected system that could have relieved the issue in Tunbridge Wells?

David Hinton

No. When we see an area at risk we try and reduce that area and put customers on to other supply areas where available. We started with 24,000 customers in Tunbridge Wells, and we can only go down to 22,000—we can only take 2,000 customers off the Tunbridge Wells area. As I mentioned already, one thing that we are absolutely committed to get invested in and funded is the expansion of the Bewl treatment works on Bewl reservoir. Many locals will know that reservoir, which has the capacity to entirely supply Tunbridge Wells without Pembury running. What resilience really means is that there is an alternative way of providing water to a group of customers. Returning to the resilience standard, I believe that the UK should have a resilience standard where no more than 10,000 customers should be reliant on a single treatment works or asset. That exists in many other parts of the country, but because of the history it does not exist in the south-east. It also does not exist in some of the other companies in the south-east either because of that history. That idea is really important.

Charlie Dewhirst

And that is something that you are looking to rectify through your investment going forward?

David Hinton

Yes, absolutely. We have started that already.

Charlie Dewhirst

And in terms of a timeline to be able to put people into a position of resilience?

David Hinton

If funded, we would like to crack on with the Bewl project straight away. We are already there doing some work there. That decision is currently with the CMA. I think that 2028 is the date when that will be finished. That is pretty quick infrastructure investment delivery, in the scope of things, as it is a large treatment work upgrade, but that is the kind of speed with which we are looking to try to get the assets in the ground.

Chair

And until then?

David Hinton

The steps we can put in place are: No. 1, that this water-quality event, with what we have put in place, should not happen again. Customers who are reliant on a single asset still face a higher risk than those who are not. That is, I am afraid, inevitable until we fix this issue of having a more defined set of infrastructure standards, and infrastructure across the industry. We are also doing lots of other pieces. We have £200 million of already-funded money to put extra connectivity and storage into Kent, and some of that will definitely help Tunbridge Wells. It is not able to be supplied entirely by a different asset, though. That will not happen until the Bewl scheme is invested in.

Chair

Mr Hinton, I would have more sympathy for that line of reasoning if this had come out of a clear blue sky—but it didn’t, did it? There were repeated failures throughout the years, up to and including the warnings from the Drinking Water Inspectorate last year about Pembury. Essentially, it looks as if your procurement, quality control and contingency arrangements at that site were just not adequate. Is that not the case?

David Hinton

No. As I said, there was no asset failure. None of the assets failed, and the assets did what they were supposed to do. All the monitors did what they were supposed to do. In hindsight, we wish that we had had an alternative chemical, which we could have switched to, and not taken three days to get to that position. That is an absolute learning. Essentially, if I look back on it, I think that because for the previous 20 years that site had worked with that chemical, we assumed that it would continue to work with that chemical. Climate change is changing the environment, and in hindsight, we will look at that and think: we should have had a back-up for that particular chemical, even though it had not failed for 20 years, running with the same one. That is my hindsight view. It is about a contingency on some of those other elements. We have got contingency on lots of our assets, but not necessarily on the chemical dosing element at Pembury.

Chair

I am reminded of the old line: “The operation was a success, but the patient died”. Is that essentially what you are telling your customers today?

David Hinton

No. I am deeply sorry to the customers, as I said at the beginning. I think it is a terrible outcome. I guess that what I am trying to do is explain the circumstances in which it happened. We have got a number of learnings—across the response, the comms and the treatment—that we are absolutely committed to putting in place. I am not trying to say that it was not a failure; it was a failure. What I am trying to help the Committee understand is how that came about, and to explain it from that point of view.

Chair

We are going to move on to looking at the incident response in some detail. Jayne is going to lead our questioning here, and then there will be some questions from Henry.

Jayne Kirkham

Good morning and thank you for coming. I used to live in Tunbridge Wells, in a previous life, so I know the area a little bit, from a long time ago. The borough council told us that it took a day for the bottled-water station to be opened, and that it was in Tonbridge, which is a different town and quite difficult to get to from Tunbridge Wells. Following complaints about that, some further bottled-water stations were opened at the cinemas and the RCP car park, but I believe that two of those are out of town, so it was a struggle for some people to get there. We have had reports from the MP of mothers with young children saying that they simply could not get to the bottled-water stations, so it does not seem to have been the best way of doing it. Could you explain why those sites were chosen, why it took so long, how many pallets of water were originally put out, and how many were used?

David Hinton

I will start by dealing with the first point, then I will hand over to Tanya in relation to the response. As we went through the event, we initially thought that we were going to lose only a portion of Tunbridge Wells. I will not go into the hydraulics, but there is a situation by which only part of the town goes without water, not the main town. That is where we thought we were, originally, which is why we put the original bottled-water station at Tonbridge.

Jayne Kirkham

Tonbridge is not Tunbridge Wells though, is it?

David Hinton

No. Also, because we were mobilising on a Saturday, in the Tunbridge Wells area we have 17 sites pre-selected, and we will choose between those depending on the size of the event. Some of them are parish carparks, so that would be for a smaller event, but obviously we would need the larger ones for this particular event. It was a Saturday before Christmas and all the carparks had cars in, so we had to effectively select one that at least had access. That is how it evolved through the process. I will let Tanya provide a bit more detail on the rest.

Tanya Sephton

To give you the context, on the Saturday we were aware that there were going to be some customers starting to lose supply Saturday evening and afternoon, so we mobilised the Tonbridge site, as you referenced. That was because pre-selected sites of sufficient size were not available for us to mobilise quickly Saturday evening. We opened Tonbridge acknowledging that it was not ideal from a location perspective, so we continued to scope locations that would be available to open Sunday. On Sunday we opened three larger sites around Tunbridge Wells that collectively, over the event, distributed 1.6 million litres of water across those three sites. They are not immediately in town; as you will recognise, it is difficult to have a large site in the middle of Tunbridge Wells. We have to ensure that when we mobilise a bottled water station it has access for deliveries, for articulated lorries to go in, and that it is safe for the public and our staff to operate in and out movement of cars and vehicles.

Jayne Kirkham

How long did it take for the first walk-in water station within Tunbridge Wells to be opened?

Tanya Sephton

The three largest stations opened Sunday, and then we worked with Tunbridge Wells borough council, which were able to operate some smaller, local walk-in sites within the town centre that we supplied the water for.

Jayne Kirkham

So the council had to do it. How long did that take?

Tanya Sephton

I do not have the dates to hand, in terms of those walk-in stations.

David Hinton

It is important to say that we also operate a priority services register, for customers who could not collect. There was no restriction on who could apply for that—it was basically if you did not have a car or had no other way of collecting, you could apply and join that priority service register and then we would deliver.

Jayne Kirkham

I was coming on to the vulnerable households and how you identified them. Did they have to come to you? How did you work out who was vulnerable and needed that delivery?

Tanya Sephton

We have what we call a priority services register that customers will be pre-registered to. They will have registered with us and identified that they were unable to collect water if there was an outage. We have a pre-selected list of customers, and we draw that list down when we know what areas are impacted.

Jayne Kirkham

Did they have to apply to go on that, or was that people on social tariffs? How did you check that people were not left off that?

Tanya Sephton

There is a mixture. The industry has a promotional process and an awareness issue in terms of the priority service register—there is an issue with the awareness that support is available. We have quite a high level of awareness compared to other companies in the industry, but there are always going to be a number of customers during an outage who will not have pre-identified with us. They might have transitional needs—it may be a temporary change of circumstances. We always have a reactive process. We have a dedicated customer care team that have a separate telephone line that they can be contacted on. We work with the LRF to share data on who they are aware is vulnerable at that point in time, and we also have a reactive list that comes through our general contact centre or through some of our stakeholders. Those reactive additional vulnerable customers will get added to our distribution list for delivery of bottled water.

Jayne Kirkham

You said there were 5,000 customers who were vulnerable on this list, so how many of those had to wait more than 12 hours for that water supply?

Tanya Sephton

Of the total PSR that we have referenced, on our reconciliation after the event we identified around 100 customers who did not get a bottled water delivery within 24 hours. We are working with them and have engaged with some of those customers since the event. Some of them contacted us and some of them did not—we are just working through.

Jayne Kirkham

That is the problem, isn’t it—some of them just won’t be able to.

Tanya Sephton

Some have confirmed to us that they were out of area, some had support from relatives, and some were able to collect it themselves.

Jayne Kirkham

The other thing that came up, considering that these were vulnerable, elderly or ill people, was that sometimes when water was delivered, a 12kg pack of big bottles of water was stuck on their doorstep, which was something they could not access. That is something that you need to consider for next time. How come that happened?

Tanya Sephton

Absolutely—that is a learning from this event. We did up to 5,000 deliveries a day. Because of the timing and volume, some of those deliveries were made outside what we call sociable hours, so the delivery team will not knock on the door but leave the delivery on the doorstep. We became aware that there were some isolated issues of customers not being physically able to collect it off the doorstep or of it being taken from the doorstep before they were aware that it was there. As soon as we became aware of those issues, we redelivered straight away to make sure that they had the water and we took it in. One of the learnings for us and, I think, for the industry, is about the needs that we register. We will collect a kind of flag to say that, yes, someone needs a delivery, but we need to be a bit more sophisticated about the capability of that delivery and whether it needs to be taken inside rather than left outside.

Jayne Kirkham

Yes, and so that people can lift it, open it and use it. To go back to the water stations, there were problems, I understand, with them being overcrowded, closing early and people struggling to get into them rather than their being accessible. What have you learned from that about the water stations that you picked and how they were manned and run?

Tanya Sephton

Overall, across the period, I think the stations operated well. On the first day we had some delivery issues that meant we had to shut down and restock for a couple of hours at one of the sites. One of the other sites had to close early because the delivery was not going to arrive in time to restock it before its closure time. We did have a few issues on that first day, but after that—

Jayne Kirkham

It is so important that in an incident like this you have a clockwork plan that cannot fail like that?

Tanya Sephton

Yes, and from that point onwards they ran smoothly, were stocked all day, every day, and did not run out. We recognise that there are sometimes issues around congestion, particularly at busy Christmas periods. That is why the selection of those sites is crucial in terms of understanding the scale, volume and traffic. Yes, there were issues on the first day, but from that point onwards they ran smoothly.

Jayne Kirkham

Something else that the borough council told us was that the centre of town was pretty much left to them. They were providing the toilets and bottled water around the town centre. That is quite a big gap. How did that happen?

Tanya Sephton

When we plan for the events and look at the locations, as is part of the emergency planning procedures, we look to have a number of sites to serve a number of customers. As I said, smaller sites within the town centre would only serve a number of customers and would not have been sufficient for us to deliver the volume we needed to deliver. We always work in events with the local resilience forum and there is this partnership of support from the local authority; they provided the support for those local areas.

Jayne Kirkham

Was that planned in advance, though? Did they know that they were going to be doing that? That is an emergency response that needs to be planned, isn’t it?

Tanya Sephton

It is part of our discussions that we have had with local authorities in other areas, before events in the past. Part of our learning on the back of previous events is that we have been engaged with local authorities, which is part of the pre-agreed site list that we have for those areas.

Jayne Kirkham

Had that happened in Tunbridge Wells?

Tanya Sephton

We had a list of pre-agreed sites and we had that agreement in place. But as we have mentioned, some of the sites were not suitable for the scale of the event that we had to run. There is some work to do post this event with the Kent resilience forums, to work through those learnings and what we can do to work closely in partnership with the local resilience forums going forward.

Jayne Kirkham

We have read about some really quite sad situations—people struggling with dialysis, dialysis not working and medical interventions needed because people were unable to receive dialysis. Incontinent people with bowel cancer were left struggling without water. Some of those care homes, the dialysis centre, the doctors, the dentists and the nurseries said that they had repeated failures—they could not get hold of the water when they needed it. The Kent fire and rescue service had to step in and support delivery. Looking back, do you think that those hospitals, care homes and some of those critical services did get suitable support? Was it resilient enough? What would you do in future?

Tanya Sephton

Our priority when we have an outage is our tier 1 customers, which are hospitals. The two hospitals in Tunbridge Wells were immediately transferred on to their pre-agreed emergency plans on the Saturday, so they moved on to a tankered supply and remained on that supply throughout the event so that they could continue to operate. That is always one of the first steps we take. The next step from there is those care settings, the care homes—

Jayne Kirkham

What happened to the dialysis centre?

Tanya Sephton

The dialysis centre also had pallets of water provided. When we had the previous event in the area, we had discussions with the dialysis centre about being able to keep them on a continuous supply. They need to have what we call a tanker injection point fitted. They have not yet had that fitted, but that would have meant they could have kept on a permanent supply of water via tanker.

Jayne Kirkham

It sounds like they did not get water for a period of time, because some of those things could only have happened if they had not had water.

Tanya Sephton

They definitely got pallets of water delivered; I would have to come back to you on what day that arrived. As did the care homes; they were starting to get deliveries. We have 19 care homes in the area, and they started to get deliveries of bottled water on the first day. We then moved into a phase where we could see that this was going to go on a bit longer with the “boil water” notice. We set up a dedicated team that was just focused on what we call our non-household vulnerable customers, including care homes, surgeries, dentists, childcare, nurseries and schools. They had a dedicated team to contact when they needed deliveries, and we would check in with them to make sure they had enough stock.

Jayne Kirkham

But you ended up having to use the fire service because you did not have capacity?

Tanya Sephton

Initially, the priority was the hospital with the tanker supplies, getting the bottled water stations up and running, and delivering to our priority services customers that had pre-registered with us. The next phase was then care homes. There were some delays in the early days, but they all got a delivery of water.

Jayne Kirkham

My last question is about the statutory compensation. Now, I may have got this wrong. I was reading the papers earlier, and they said that on 8 December—so after the incident—some of those customers were offered a £50 advance credit. Do you think that is sufficient, given the impact of the outage?

Tanya Sephton

Could I clarify? There is a statutory compensation process that we have run since the event finished. What that article is referring to is when we implemented the “boil water” notice after the outage. Something that we have engaged with customers on following previous events is the financial impact of having to travel to a bottled water station and the extra energy costs of boiling water. We recognised that early in the event, and what we did was apply an advance credit to all customers on one of our financial support tariffs. Those financially vulnerable customers got that payment midway through the event so that, if they had any immediate expenditure, they could have some extra funding.

Jayne Kirkham

Could they have used that money, for example, to travel to a bottled water station or would it just have been a credit on their bill?

Tanya Sephton

The only means we have to transfer the money to the customer is to put it on to their water account; then they can call us to ask for it to be paid into a bank account of their choice.

Jayne Kirkham

So it would be a bit more complicated than that. Thank you.

Henry Tufnell

Can I touch on the local resilience forum, Mr Hinton? There have been lots of previous incidents where this has happened. If you look back to 2022, I think you had 3,000 properties in Tunbridge Wells with an affected water supply for four to five days. In June 2023, you had thousands of customers across various locations out of water for a week. You had local MPs in June 2022, including the then MP Greg Clark, talk about a lack of “leadership, operations and communications” and a void of “well-rehearsed plans”; I think Nus Ghani described it in 2023 as “groundhog day”. In the context of what your colleagues have just described about the need to do more work with local resilience forums, and given that you are relying on the fire and rescue service to deliver water to customers, what needs to happen for you to learn lessons and to provide the support that your customers need in situations like this?

David Hinton

If I can take you back to one of the first events you mentioned. As a business, we had not faced any major events up until about 2020. Once we started to see these events, we have done a lot in terms of response. We owned one tanker, which was not uncommon for a water company.

Henry Tufnell

So you were just unlucky in terms of the timing of being made CEO?

David Hinton

It is what it is. I started when I started. We had one tanker; we have now got 12. We had no dedicated alternative water supply resource within the business because it was not used; we have now got over 20 employees who just do that. We have increased the amount of stored water that we have got. We have increased the number of bowsers that we have got. We have done so much in response. We have got a team dedicated to vulnerable households. We have got contracts in place. We mobilised over 100 people in this event; we have had nowhere near that resource on any previous event. In the absence of the infrastructure being in place, we have focused our resource on the response and the response capability. None of those assets and none of those resources existed in any of those previous events. They have all been put in in the last two to three years. The tankers arrived last year, and those tankers moved something like 2 million litres of water around the company during that period. That resource was not available to us. We also used the supply chain; at one point, we had well over 20 tankers working on the event. Those kinds of resources were not available. That is the learning that we have been able to put in place early. That is the learning we put in place for this event. It did not stop customers being cut off. That is our goal: to keep customers connected. We did not stop that, and I will be forever regretful of that. Again, I apologise for that, but we have done an enormous amount on the response capability of South East Water, as we went through those different events.

Henry Tufnell

Why is there such a disconnect between what you have been putting out and what the local council has been sending in correspondence to the Committee? Why has there been a disconnect between what customers are experiencing on the frontline and what the local MP has submitted to the Committee, and the evidence that you are giving today?

David Hinton

We are giving the full picture of evidence after going through the whole event. Many of the comments were made very early on in the event—in the first day or two, when we had some teething issues with the sites. We were trying to put a site out well within 24 hours’ notice of the event starting. That initial period is really difficult, particularly over the Christmas weekend; it is difficult to generate those bottled water stations, for example. It did not take us long at all to get into the swing of things, and I think it was over 400 hours—somewhere in that area—that the bottled water stations were open, and we only had about two hours of total downtime during that 400 hours. We have got the full picture of the event because we have got that information. It is inevitable that customers who experience a substandard service—I hate it when anyone does—speak to the local authority, and that becomes a picture of the event, but it is not a total picture of the event. To understand the full picture, we need to look, as Tanya has very carefully outlined, a number of things. We were doing 5,000 PSR deliveries a day. Some will have gone wrong, and I hate that, but that is still a pretty substantial resource effort. Again, I would rather not be doing it, but I am just going to provide the context of the full event. There are unfortunate case studies that indicate that they did not work 100% all the time, but on the large look, it functioned much better than at in any previous event in the past.

Chair

Can I explore with you the chronology of the setting-up of the bottle stations? Let us go back to Sunday 30th. You had a conversation with the local MP at that stage, where you were pressed to extend from the Tonbridge site to set up a number across Tunbridge Wells. You suggested at that point that you would have one in the Pembury Tesco. Is that correct? Did you set that up? Tanya, do you know?

Tanya Sephton

I can answer that. The Tesco site was a prearranged, pre-scoped site. We have used it in the past.

Chair

Notwithstanding the fact that you had been told by Greg Clark, the previous MP, that it was not a suitable site?

Tanya Sephton

At that time, we inquired about using it because it had been used before. There was refurbishment work being done, and they said that we were not able to use that site, which is why we then moved to other sites on the list.

Chair

Right, so then you moved to—let me get this right; these are not places that I know—the Knight’s Park location and the St John’s leisure centre, and there was a problem. You went to St John’s leisure centre first. Is that right?

Tanya Sephton

I would have to check that—a sports centre.

Chair

That caused some difficulties with traffic management.

Tanya Sephton

Yes. There were some initial traffic issues at the sports centre site when we opened on Sunday morning.

Chair

And then there was the Knights Park location. Those were your three sites.

Tanya Sephton

I would have to check the naming of the sites; I have the sports centre, the RCP car park and the Odeon cinema.

Chair

You had problems with these sites, which you had pre-identified, because you were set up in car parks that were being used by people for parking cars. Forgive me if I am being obtuse, but was that not somewhat foreseeable?

David Hinton

If I may—because I said that—we have 17 prearranged sites, and we are not going to use all 17 at once; they are very much scenario-based. A small burst would be a parish site, and so on. Equally, we have 17 because we also realise that, at different times of the week, day or year, they are going to be used differently. As soon as we went through the 17—initially, on the Saturday—it became clear that we would not be able to set them up until Sunday, which is what we ended up doing; we wanted to set something up so that customers could go somewhere to get bottled water. The most obvious, evident place was the one we chose. It was not ideal; I absolutely agree.

Chair

You “wanted to set something up”? This doesn’t exactly sound like a strategic approach.

David Hinton

Well, the alternative is having completely open areas of land all over the region that you use only for that purpose, and that would definitely not be in an area accessible to Tunbridge Wells customers. So we choose existing infrastructure. I have to thank those sites, actually, for letting us on to them—because they do not have to—because that provided, as Tanya said, the safe flow-through of traffic. I visited a number of them over the week, and they were well set up; the customers were very complimentary about how it was provided.

Chair

Given the performance of South East Water, are we going to get to the point where you do actually have sites that are just permanently set up for providing emergency supplies?

David Hinton

Hopefully that will not be needed, if we get the infrastructure we need to put in place.

Chair

“Hopefully”, indeed. Moving on, it has been suggested to us that the information in the priority services register was not complete, accurate and up to date. Is that correct?

Tanya Sephton

We go through a process where we revalidate the priority services register with customers every two years.

Chair

It was suggested to us that there were people who had previously been on the register on a temporary basis and no longer required priority services but were still getting them in any event. Is that correct?

Tanya Sephton

There may be customers in that scenario. We—

Chair

Okay. We also heard that nobody was answering the South East Water telephone line for water deliveries, so people then turned to the Member of Parliament’s office. Were people not able to get through on the water line?

Tanya Sephton

They were able to get through. We had a high volume of calls, so the wait times were longer than we would like. On the Sunday, our average wait time was 18 minutes; we were getting through the calls. Everyone who requested a delivery of bottled water and was added reactively to the list received it within 24 hours. We can confirm that, as part of the reconciliation.

Chair

Did you not, in fact, end up using the MP’s office as a clearing house for people to be added to the priority services register?

Tanya Sephton

As I mentioned earlier, whenever there is an outage, there is always a number of customers who come through a stakeholder or another channel rather than coming to us directly, but they will always be processed in the same way, whatever channel they come to us through.

Chair

I am told that 160 vulnerable people had their delivery requests passed through the MP’s office. Surely your telephone service was just not adequate.

Tanya Sephton

In one particular day, we had more than 600 reactive requests come through. Some of those came through the MP channel, as you have referenced, but the majority came through our phone channels.

Chair

That 160 did not, though.

Tanya Sephton

No; they came through stakeholders.

Chair

Just to be clear, Mr Hinton, you gave yourself an eight out of 10 for response earlier. Is this an eight out of 10 response?

David Hinton

I cannot say why the customers contacted the MP, but we had an—

Chair

They are saying it was because you wouldn’t answer the phone.

David Hinton

Well, we had an 18-minute wait time, as Tanya said—at the peak. An 18-minute wait is too long, but had they tried to continue with that route, they would have received bottled water via the company.

Chair

Can I pick up one other point? I think I heard you correctly earlier saying that you had no incidents before 2020. Was there not a bad outage in 2018?

David Hinton

That was the freeze-thaw outage—"the beast from the east”. That pretty much impacted the whole industry.

Chair

Did Ofwat not say at that stage that customers had been badly let down?

David Hinton

I believe they might have said that, yes.

Chair

They might have said that. Okay. We will move on to questions around communications and compensation.

Sarah Dyke

Good morning. David, before you took up senior leadership roles at South East Water, what was your professional background?

David Hinton

I am a biotechnologist by training. I have worked as a microbiologist at various different laboratories, including the Public Health Laboratory Service. I have largely been employed by South East Water in its different forms for 26 years. The latter part of my career has been in economic regulation, environmental regulation and water resource planning.

Sarah Dyke

When the crisis back in December hit, what was your first port of call? What did you do?

David Hinton

In our emergency plan, we have roles. As CEO in an incident, I am effectively on the gold team and my role is to liaise. We are not a big company, so I am on every incident call understanding the issue—that is three or four times a day. I then update the board, stakeholders and regulators. I am the external face with all the different stakeholders on that issue. I also make sure there is enough resource to deal with the issue, and if procurement of resources needs to be signed off. I am largely involved in it. This one was slightly different because it was a water quality issue, in which I also added—I think—some personal expertise in trying to solve it. I got involved on the ground.

Sarah Dyke

You got involved in the scientific element of the role.

David Hinton

I did a bit, yes.

Sarah Dyke

Were there not enough people in the organisation to do that element of work?

David Hinton

We are only 1,200 people, and the water quality team—process scientists—is about seven or eight. I could have said, “No, I’m going to leave that to them,” but it is an area I have some expertise in. I spent a lot of time at Pembury. We needed to solve it.

Sarah Dyke

So you didn’t think your team had enough expertise in it, and you felt that you had to oversee that element?

David Hinton

We are the sort of company where if you have expertise, you would help.

Sarah Dyke

Okay, but there is a team of scientists doing it.

David Hinton

Yes, there is.

Sarah Dyke

There is only one chief executive in the organisation.

David Hinton

Yes, there is.

Sarah Dyke

You have been criticised for not being visible in a CEO role—there is only one of you doing that role—and for not communicating with consumers about the developing situation. Why did you choose to take that approach and not be the public-facing person of the organisation as a chief executive? It seems that you battened down and went to your comfort zone as a scientist.

David Hinton

Well, I went to the heart of the issue, but to actually answer your question—

Sarah Dyke

Are your customers not the heart of the issue?

David Hinton

Solving the issue for the customers was my priority. If I can answer the question, when we run an event, what we are trying to do for customers is give them information about what caused the event, whether they need to worry, whether there are any risks and how we help to resolve the event. Those are the key communication messages.

Sarah Dyke

You have a team of scientists to do that. You did not need to get stuck into that piece of work.

David Hinton

No. In terms of the external communication question, we use what we call the right people at the right time. Early on, we had Tanya on customer impact and then we went to our operations director and senior scientists to talk about those issues. At the end of the process, I did a number of media interviews to explain the whole process.

Sarah Dyke

What date?

David Hinton

It was past the end of the process.

Sarah Dyke

Why did you choose not to do any media during the incident?

David Hinton

That is what I was getting to. I have done a number of interviews on events and various issues in my career, but what I have found recently is that when I do an interview, the three things that we are trying to get across to customers do not get put across to them—I am getting asked about all the other CEO questions. I am very happy to do that, but at the right time in the event. During the event, we want customers to understand the risks. I get asked about what you might imagine I get asked about, which is dividends, salary, etc. That is not the key message we want delivered to customers during the event. I am very happy to take those questions at any other time, but not during the event.

Sarah Dyke

Okay. There seems to have been a period of time during the incident when there was simply no communication coming from South East Water. There was certainly no consistent voice during the crisis; various different executives were being put up, which did not really inspire confidence. There was not a clear narrative around the media engagements. I just feel that you were not part of that, when your customers wanted to see you out there, being visible and being the focus of the organisation. Why was that? Why was there not clear communication from the outset and why were a number of different spokespeople being put up, with confusing messages being put out to the public?

David Hinton

I will ask Tanya to add a bit about how much we did with the media and whether we had a gap on communications, but in terms of the clarity of the communications, the story changed—in our own mind, as well as in the communications—throughout this event. We initially thought that it was a batch of chemicals, and that is what we originally communicated. It then moved. Unfortunately, we—

Sarah Dyke

Who authorised that statement on the bad batch?

David Hinton

I am sure I did. Ultimately, I authorised all the statements that went out to the press. So, the story—

Sarah Dyke

Are you sure that you did?

David Hinton

I am pretty sure—or the director on call did, if it had been at the weekend.

Sarah Dyke

It was later disproved, as we know. Why did you authorise that?

David Hinton

Sorry—what was later disproved?

Sarah Dyke

That it was a bad batch of chemicals.

David Hinton

When we initially went with the press release, that was what we thought. The treatment works stopped functioning, as I said in response to an earlier question, in the middle of the previous week, and the thing that had changed that week is that we had taken another batch of chemicals. The classic scientific question is: things have happened, things have changed, so what actually has changed in the process, because it has not done this before? The batch of chemicals was delivered on the Wednesday, so our working assumption was that that batch of chemicals was not functioning as it normally does. We then effectively went through that communication journey. We said, “This is what is happening.” We have been criticised for not giving enough detail in the past, so we were trying to give customers some idea about what we thought was causing it at the time. Unfortunately, that story changed in our own mind and therefore the communications started to be—I completely understand how they would sound. If you heard the communications, it felt like we did not have a handle on the issue, which in reality, in terms of what was causing it, we didn’t for the first three days. We didn’t have a complete, definite answer on what would solve it for the first two to three days, and that really hampered our ability to communicate. In terms of the volume of communication—

Tanya Sephton

There were various different channels that we used throughout the event. Every day, on the back of each incident call, we would send out a stakeholder update—a customer text message—which is a new system that we implemented on the back of the last event at Tunbridge Wells. Across the event, we sent over a million text messages to customers. Every day, we sent out multiple stakeholder emails and media statements; there were 150 media statements and 40 stakeholder emails throughout the event. We also did 15 media interviews. So, coverage-wise, there were a lot of communications going out. As for the messaging, I understand that, because of those changing explanations and those changing resolution times, it was frustrating and confusing for customers.

Sarah Dyke

The key thing is that a lot of misinformation was going out during that time, wasn’t it? Correct me if I am wrong, but the first time that a spokesperson was put up was on 4 December. That is significant—that is six days into the crisis.

Tanya Sephton

We gave media statements on the Saturday and Sunday—on day one and day two. A colleague and I gave media interviews on the Monday morning and on the Monday afternoon. So they started from the first—

Sarah Dyke

A number of different people were being put up for—

Tanya Sephton

Yes, depending on the news channel and depending on the subject.

Sarah Dyke

Right. Do you not think that one individual—one key spokesperson, perhaps the chief executive—would have been a better person to put up for those interviews?

Tanya Sephton

As David said, our approach is always to have the right person at the right time. At that point, we wanted to get the public health message—the service message—across. Therefore, it was the water supply director and I who were putting the message out there.

Sarah Dyke

Some of the information being put out was over-optimistic about the timeframes for restarting the water supply, and that was the case over a number of consecutive days. Then there were messages relating to the boil notices, which were unclear as well. Why was the messaging around the water supply not clearer, timely and more accurate?

Tanya Sephton

After previous events, customers have said to us that they want to know a resolution time so that they can make their own arrangements when there is an outage, so we were very much aiming to provide a resolution time, and we were providing that time based on the best available information that we had at that point. At the weekend, we had a new batch of the chemical coming in on Sunday morning. We expected that to work, because that had worked in the past. We expected the site to be back up and running and customers to come back into supply on the Monday, so the resolution time reflected those expectations. As it became clear, as we went into Monday and Tuesday, that those resolutions were not working—even though some customers had come back on, 14,000 were still off and we needed to take further steps—we had to move that resolution time as we were trying the different chemicals, and trying to get the site back up and running and stable.

Sarah Dyke

It is interesting that your early communications suggest that the restoration would come back by 2 pm on 1 December, but your internal log showed insufficient storage. Why was that?

Tanya Sephton

As we put the new chemical in on the Sunday morning, we expected the site to be back up and running Sunday afternoon, once that had gone in. It took longer to stabilise that treatment process, and the site was not back up and running until the middle of Sunday night, which meant that the resolution time was pushed further backward because the storage levels had not got up to the required level to turn the pumps back on.

Sarah Dyke

Turning to water delivery, that is done by a contractor. Is that correct?

Tanya Sephton

The vulnerable customer deliveries?

Sarah Dyke

Yes.

Tanya Sephton

It is a combination. We have an in-house customer care team that do some of the deliveries, and then depending on the scale, we have a contract resource.

Sarah Dyke

When the contractor was out, what kind of information was being fed back to you? I understand that the information being fed back to you was not what was the reality on the ground. Who did you have out on the ground to deal with the strategic overview of the water?

Tanya Sephton

In terms of the water deliveries, that is our own in-house customer care team, who supplement the contracted resource. They are out there doing the deliveries as well as our contracted resource.

Sarah Dyke

Looking back on that now, do you feel that that process was smooth, and that accurate information was being processed through?

Tanya Sephton

I do, yes. We were getting feedback directly from our customer care team making those deliveries that those deliveries were very welcomed by customers. Across the event, we have made nearly 39,000 deliveries to customers, and we do get feedback from them. We have engaged with some of those customers after the event, and we have got feedback from them already that they really appreciated getting the water.

Sarah Dyke

I have heard that the MP’s office team were out on the ground feeding that information back, because there was not the correct information going back about the necessary storage of water and how sites were running out. Local councillors were also very much involved on the ground. Thanks to them, perhaps some further disasters were stopped. Why did you not have that level of control on the ground, and why did it take other stakeholders to participate in that to get the right information back to you?

Tanya Sephton

We were getting the right information. We have reports back in from each of the bottled water stations—from all stakeholders, as well as our own teams that are on the ground. We have teams on the ground on the bottled water stations, teams doing the deliveries, and technical teams out in the network, and we get feedback from all those channels through an event. We will correlate that feedback to make sure that we understand what is going on in the field.

Sarah Dyke

Would you say that your crisis comms and crisis management has been flawed in this incident?

Tanya Sephton

It is always tricky, in an event, to meet the expectations at the same time as dealing with the complex situations. There are definitely learnings to take away. We have learned from previous events that where—

Sarah Dyke

Excuse me for butting in, but as the Committee has already said, there have been a number of incidents over the course of many years now. Surely, lessons should have been learnt during those incidents. Why are we still in a situation here?

Tanya Sephton

Lessons were learned. I mentioned earlier the text messaging system—we did not have that in the previous event. We got feedback from customers in that area last time, which said that there were not sufficient methods of communication, the frequency of the communication was not sufficient, and the clarity of the communication and the empathy was not there. This time round, we had a text messaging system that we did not have before, and we sent over a million text messages to customers in that area. We have had feedback to say that those updates were welcomed. The clarity of the communication is challenging when it becomes an evolving situation. We set an expectation of resolution, which sadly we were not able to meet. Because of that, the communication is poorly perceived, but the frequency, content and tone of those communications have improved since previous events.

Sarah Dyke

We have had a number of different elements of correspondence from businesses and individuals. One local resident said the biggest thing for him was the communication from the water company: you kept updating every 12 hours, saying, “We’re expecting this to be fixed within 12 hours,” and then it went on and on. These are people who want a water supply. They are expecting a water supply. They are getting different notifications about boil notices: so, there isn’t an issue, but they should still boil their water. What is going on here? Why wasn’t there clarity for individuals and businesses? The number of businesses affected is extraordinary, particularly, as you rightly say, given that it was the week before Christmas. A lot of these businesses had Christmas parties booked, and this caused them a significant amount of distress. What do you have to say about that?

Tanya Sephton

First of all, we are sincerely sorry for the distress that it caused to any of the customers in Tunbridge Wells and the impact on any of those businesses. In terms of the messaging, we have learned through this event that, while we were striving to give a resolution time—because customers had told us they want to have a resolution time—we need to be more transparent about what is required to be delivered and be successful to meet that expectation. I think that it would have provided a bit more clarity for customers to have understood, when the time moved, why it had moved. It was not because we did not know; it was because something that we expected to work had not worked.

Sarah Dyke

So an improvement in your crisis comms is required.

Chair

On that point, Jenny, you have some questions on crisis comms.

Jenny Riddell-Carpenter

David, I am actually quite shocked by what I am hearing today—the scale of this, the number of people it had an impact on, and in truth, the lack of accountability that you are taking today for addressing or recognising some of those issues. As somebody who used to work in communications and crisis communications, I am genuinely quite shocked. I am sure that your rehearsed answer at the beginning will be welcomed. Was that the first apology you have given personally?

David Hinton

No. I am particularly apologetic, and I think I said that on the media interviews I gave as well. The culture of my business has a small community feel to it. We absolutely hate it when customers do not have water—we are failing in our primary job, so we really feel it. Many of our staff live in Tunbridge Wells. It is really deeply felt. On the accountability point, absolutely there is accountability for it, but the fix, I say again, is an infrastructure fix. I go back to the point that the West, which we also manage, with the same people, would be the best performing company, in terms of interruptions, if it was still an individual company. The difference between the two areas is an infrastructure difference, which we absolutely need to solve. That has been my strategic priority. That is where my accountability lies: getting this infrastructure in for South East Water customers. That is really where the resilience gets delivered from.

Jenny Riddell-Carpenter

I understand that infrastructure failed, but what we are trying to say, or certainly I am trying to say, is that you let people down on a human level with your response—your response on the ground and the total failure of communications throughout that period. Yes, infrastructure fails. We accept that. Things are always going to happen; in every industry and organisation, infrastructure will fail—we know that. But it is about the human response—the empathetic response. If I can ask you to take anything away from this entire process, it is that you have to address that. Infrastructure will continue to fail in the future, and I hope that your investment plans will seek to address some of that, but it is the human response that is fundamentally lacking in this. There are two things that I want to point out and that really shocked me today. The first is your response to the local MP, on the phone, when you said, “How do you sleep at night, making this political?” He is not even in the same party as me. Sitting here today, I have not been able to get over that sentence. Do you think that we are making this political? Do you think this is a political football?

David Hinton

No. There were two parts to the conversation. I am not proud of how I reacted. It was in the middle of the event, but it was a private conversation. What was said to me at the beginning of that conversation elicited the response that has been quoted, but it was a private conversation. I am happy if we can leave it at that. Can I just pick up on the human response piece? We are super-conscious of the impact on the individual customer. We go above what we are required to do on the PSR piece. Doing GP surgeries and so on is not part of any of our statutory duties; we did those because we saw the need. Giving the £50 extra, because we knew the hardship from the “boil water” notice, is not part of any statutory duty. We did that because of the human feeling that we saw happen. We are also really conscious of when the event happened. We have 15 days to make GSS payments—the compensation payments to customers. We made those first-day available because we were conscious of the cash-flow impacts on small businesses in Tunbridge Wells. We are not just effectively, if you like, a business driven by regulation. We think about the customer first and that is one of the big culture pieces. If we do the right thing by people, we should do the right thing by regulation. All those little steps come from internally—in the team—“We need to do this for these people. We need to do that for these people.” It was all a very human response. We missed some customers and we did not deliver to some customers, and I hate that, but we did not miss anyone who phoned up and asked us to deliver it. We delivered it as soon as they told us that. I felt that it was a very, very human response.

Jenny Riddell-Carpenter

To be clear, I am sure that many of your staff at South East did a great job, went above and beyond, worked weekends and longer hours, and probably do not enjoy big salaries like yours. I do not mean a criticism of them; I have no doubt that they went above and beyond. I am talking about the leadership of the organisation, and the need to lean into it. I will go on to my second question. You said earlier about the crisis comms response statements being signed off. You said that you are pretty sure it was you, unless it was at the weekend and then it would have been the director on call. You earned half a million pounds last year; why the hell were you not working at the weekend during a crisis?

David Hinton

Well, as it developed, I was but Tanya was the director on call at the weekend so, as such, it’s just process, right? The director on call signs off the press releases in that process. I was on the call to Tanya all the time. I was on the call to Mike Martin all over the weekend as well. I just could not, hand on heart, say that I signed off every single press release because of that caveat.

Chair

Do you understand, Mr Hinton, that when we come back to this conversation with Mike Martin it is not about personalising it between yourself and Mike; it is about the possibility that that tells us something about your capacity to give leadership in a crisis? Does that reflect your capacity to give leadership in a crisis?

David Hinton

I don’t think it does. My leadership in a crisis was that I was sleeves rolled up, in the middle of all the events. Like I keep saying, we are not a very big company; we are only 1,200 people.

Chair

But you get paid £400,000 a year.

David Hinton

I do and, as I said before, that is not something that I decide. There is a remuneration committee that looks at market prices, and so on. I do not decide that particular salary. I roll my sleeves up and get stuck in. I know this business inside out. I know the regulation of the industry inside out. All my staff will tell you that I am absolutely dedicated to getting the infrastructure issues fixed, and the resilience issues fixed. That is where my heart and soul lie: on fixing this issue. I absolutely hate it on an individual level.

Chair

For what it is worth, I believe every single word of that, but it does not necessarily make you a corporate leader, does it?

David Hinton

It is one of the attributes: you have to believe in what you are doing. You absolutely have to believe in what you are trying to achieve. In fact, I would say that is quite a high attribute. The other one, I would say, is that my staff are behind me on it, because they absolutely are. We are absolutely as one in trying to get this issue solved, and that is definitely another leadership trait.

Chair

We are going to move on to look at the impact on businesses, and some of the compensation issues.

Tim Roca

Mr Hinton, what do you understand the impact caused by this outage on local businesses to have been?

David Hinton

Well clearly, for a number of the businesses, having no water would have a huge impact on their ability to do what they normally do. It would have had a horrendous impact on restaurants and service businesses, particularly at the busy Christmas time. I do not deny that.

Tim Roca

Do you have a sense of the financial impact that it had? Can you put a figure on it?

David Hinton

No. We have had estimates and we are in the process of going through, internally, what we think the impact might be. We have allocated £600,000 as an extra piece on top of the compensation—which was £16.5 million in total, across both household and non-household—particularly aimed at those customers who had an impact, and who are unlikely to be insured for this particular issue. It is the UK utility model—and in fact it is not just the UK—that the compensation for loss of utility is about the loss of the service, not the loss of the value to the business.

Tim Roca

Can we stick to the impact on business for a moment? You have various estimates. We have heard from the business improvement district and the council that the financial impact on businesses is up to £20 million. Is that your understanding? Is that a ballpark figure that you recognise?

David Hinton

No, I don’t recognise that number.

Tim Roca

Do you have your own number, then?

David Hinton

No, we are in the process of looking at that. That is part of our allocation of the £600,000 to small businesses—

Tim Roca

At the moment, you don’t recognise the council’s figure; you don’t recognise the business improvement district’s figure. How many businesses were impacted? I was looking at the GSS numbers and I couldn’t quite understand. Do you know how many businesses were impacted?

David Hinton

Yes, we have that figure.

Tanya Sephton

There were 1,514 non-household customers—so businesses—that were impacted. Of the 1,500, around 75% have consumption equivalent to a domestic household; they might be a low water user like a shop with a toilet and sink. They will range from retail shops, to office buildings, to local authority sites like sports centres.

Tim Roca

We have seen evidence of a fishmonger who lost £7,000 in stock alone and a nursery that lost £16,000, which is the cost of two free places for a disadvantaged child to attend for a year. So can you come back to the compensation you are providing? You have not worked out what the impact is on business, but you have already arrived at a figure for compensation.

Tanya Sephton

Yes; as David mentioned, our total compensation package comes to £16.5 million.

Tim Roca

We’re sticking to businesses.

Tanya Sephton

Ninety-five per cent of those impacted were domestic customers, so the lion’s share of that compensation pot goes to the domestic customers.

Tim Roca

How much is—

Tanya Sephton

The business compensation is £1.9 million, and that follows what we call our guaranteed standards of service scheme.

Tim Roca

The GSS regulations.

Tanya Sephton

The GSS regulations, which were positively strengthened and refreshed last year by Government, following quite outdated values. So the businesses’ compensation package is £1.9 million. We have taken a number of steps to make sure that that doesn’t stick purely to the regulations, in the sense that we have some modelling data that suggests some of those businesses at times might have had water restored—because it’s a gravity-fed system—but we have just taken a blanket approach to say when it was off and came back on. We also have within the regulations the opportunity to cap, based on the annual water charges, but we have not applied any caps to either businesses or households through this process. Then the additional step on top of that is the hardship fund that David mentioned.

Tim Roca

The £600,000. So you don’t know what the impact is on businesses, or certainly you don’t recognise the figure provided by the local authority, but you have already arrived at a compensation figure.

Tanya Sephton

The compensation figure is derived by the application of the GSS regulations.

Tim Roca

So you do not intend to go beyond the GSS and the additional £600,000. Do you think that is fair?

Tanya Sephton

The GSS regulations set out what our requirements are—

Tim Roca

That wasn’t my question. My question was: do you think it is fair to local businesses?

Tanya Sephton

Based on the value of the compensation the average business receives, and based on the fact that 75% of them use the equivalent of what a domestic household uses, that is four years’ free water in effect.

Tim Roca

I appreciate that. That wasn’t my question, though. Do you think it is fair? The evidence we have got is that, potentially, 32% of businesses say their survival is threatened by what happened.

Tanya Sephton

Yes, and we are really sorry for that impact. The expectation is as we set out. The GSS regulations are not designed to cover financial loss as a result of loss of water service or power or flooding for those businesses. There is an expectation in industry that businesses will have insurance that will cover those losses.

Tim Roca

We might come back in a moment to whether that is a reasonable assumption to make. Mr Hinton, do you think it is fair? Do you think, when footfall fell by 50% in the town centre, that the compensation you are offering is adequate?

David Hinton

I think the fairness question is one of policy around setting GSS regulations. They are very much designed to do what they do—loss of service, not loss of value. It is ultimately a legislative, regulatory decision about how that works. We are not funded—I am not just talking about us; I’m talking about all utilities—for that kind of insurable loss coverage, which is effectively what you are referring to. I know it is horrible for customers to go through that impact, but that is a much bigger question than just South East Water. That is effectively covering insurable losses via a utility process. It’s not just us; it is broadband, gas and electricity all with the same model—that insurable losses are not paid for by those utilities.

Tim Roca

There will be businesses that think that you are hiding behind the GSS regulations. You have clearly made a determination that GSS is not sufficient, because you have added a discretionary £600,000.