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?

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

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

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?

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.

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

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—

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?

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.

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

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.

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?

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.

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

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.

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

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.

So you have tolerated a single point of failure.

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.

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?

If I could split it into three sections—

No, give yourself the mark out of 10.

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—

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

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.

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

It is really hard on a single number.

Well, you have 10 numbers to choose from.

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.

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?

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

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.

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.

What was that change?

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?

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.

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.

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

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.

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?

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.

Who is responsible for the infrastructure?

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.

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

Because the infrastructure needs to be in place.

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

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.

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?

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.

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

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.

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?

Yep.

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

If I can give some context to that conversation—

Is what I have read to you correct?

I don’t recall the entire—

Is that what you said to Mr Martin?

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

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?

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—”

So you don’t think you had done?

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.

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?

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.

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

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.

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

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

Right. So that is your base salary?

Yes.

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

Yes.

Would you expect to receive that again next year?

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.

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.

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.

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.

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?

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.

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

Yes.

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

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.

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?

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.

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

Yes.

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

Exactly.

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?

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.

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

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.

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?

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.

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

Yes, absolutely. We have started that already.

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

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.

And until then?

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.

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?

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.

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?

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.

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.

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?

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.

Tonbridge is not Tunbridge Wells though, is it?

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.

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.

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

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.

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

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

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.

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?

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.

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?

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.

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?

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.

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

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

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?

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.

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?

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—

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

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.

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?

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.

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?

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.

Had that happened in Tunbridge Wells?

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.

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?

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—

What happened to the dialysis centre?

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.

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.

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.

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

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.

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?

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.

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?

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.

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

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?

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.

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

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.

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?

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.

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?

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

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

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.

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?

I would have to check that—a sports centre.

That caused some difficulties with traffic management.

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

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

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

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?

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.

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

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.

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?

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

“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?

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

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?

There may be customers in that scenario. We—

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?

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.

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?

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.

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.

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.

That 160 did not, though.

No; they came through stakeholders.

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?

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

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

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.

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?

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

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

I believe they might have said that, yes.

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

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.

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.

I did a bit, yes.

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.

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

Yes, there is.

Yes, there is.

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

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.

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.

It was past the end of the process.

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.

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—

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

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

Sorry—what was later disproved?

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—

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.

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—

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

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.

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.

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.

The vulnerable customer deliveries?

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.

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.

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.

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.

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—

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.

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.

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

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?

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.

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?

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.

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?

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.

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?

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.

But you get paid £400,000 a year.

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.

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

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.

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

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

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.

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

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.

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?

No, I don’t recognise that number.

Do you have your own number, then?

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

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?

Yes, we have that figure.

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.

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.

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

We’re sticking to businesses.

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

How much is—

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

The GSS regulations.

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.

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.

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

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

The GSS regulations set out what our requirements are—

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

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.

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.

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.

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?

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.

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.

That is our people point. We have done this before. On occasion, we recognise things like the fact it is Christmas. The GSS regulations don’t recognise that it is Christmas. So we go, “What discretion have we got?” We don’t cap it at two years’ annual bill—we add £600,000.

Your discretion is unfettered, isn’t it? You can make any—

No, but nevertheless, we are stepping into a loan when we don’t need to.

You have got the discretion to make whatever you deem is appropriate, or the company deems appropriate.

Yes, we have the discretion to make an infinite amount, but as a business, that is not the model that all utilities in the UK operate.

That goes back to my question, then. Do you think it is fair, bearing in mind that the losses seem to be up to £20 million, that you are offering £2.5 million?

Fairness is not for me to decide in this. We are operating within the regulatory regime and legislative framework that has decided this is the way utilities should, effectively, pay compensation to customers.

As a community-based company, you don’t have a view on what is fair? Fairness is not something you will find in the GSS regulations.

I know. We are a business. We operate within the same framework as everyone else. One of the big events we talked about earlier, in ’21-’22, was the Storm Eunice event. That event cost us something in the region of £8 million, because we lost power. We lost power to the whole of Sussex. We paid our customers, in those instances, GSS payments and we paid penalties and fines, but we had no redress with the power network that caused that power failure. And actually, we weren’t totally insurable on it either. It is a UK model. I don’t decide fairness on the UK level. It is above my pay grade. And many are insured—it is also covered off like that.

I am not sure they are insured. The stats are not as clear as they perhaps should be. There is an Aviva survey that says that 62% of SMEs aren’t insured. There is a YouGov survey that says that only 21% of small businesses have a plan—understandably, because this is a utility everybody depends upon to work without failure, in all honesty. I would strongly encourage you to give a positive response: would you consider a scheme at least for small businesses, if they were able to evidence their losses?

That is exactly what that fund is for. That £600,000 is for those who can evidence the losses.

But that is a fraction of the amount.

Well we don’t know, do we? That scheme is yet to be administered. It is yet to be decided how it will be allocated. We are working with local authority colleagues on how to do that. Businesses are very welcome to ask whoever ends up allocating that expenditure out to customers—we don’t think it is right for us to do it, although we will be involved.

If there are claims beyond the £600,000, will you entertain reimbursing companies for those losses?

We will look at the evidence before us; absolutely.

I am not sure that is going to give a great deal of comfort to small business owners.

Does this come to the crux of your evidence today? You are just determined not to admit liability for anything because you know there is going to be a cost attached to it.

No, that is not the case at all. This is very much a framework question. The compensation in utilities is very much a framework question.

No, it is as Tim has just said—it is a fairness question. You have accepted the principle, by your £660,000 ex gratia payment, that this is not an adequate figure. Frankly, it is beads to the natives, isn’t it?

Sorry?

The offers you are making to these businesses. It is all sorts of businesses. You have been told about hospitality businesses. I have one letter here from a high-end jewellery store that explains the very substantial losses it caused to them, because people were not coming into the town centre any more. That is all a consequence of your failure to handle this outage properly.

I fully understand that impact on business customers—

You just don’t think you have any liability to pay for it.

The UK utilities model—

You are hiding behind the model, are you not?

I am not hiding behind the model. We have gone above and beyond what we need to pay across all of the GSS compensation. We have not just done GSS; we have done discretionary on top of GSS. There are a number of caveats we could have done. In terms of the running of the incident, we put all the resources we possibly could into it. Cost has never been a question.

For the first three days, you didn’t have any idea what was actually causing it. That is your own evidence.

We had a running theory about what was causing it, which was then informing our resolution times. That running theory proved to be the actual cause, just not quite the way we saw the remedy occurring.

You see the thing is, if any of these businesses were to take legal action against you, you would defend it, would you not? And you would get the best quality lawyers against their small businesses. So there would be no equality of arms here. Would there be? You can just sit there and hide behind the GSS regulations.

I am not hiding—the GSS regulations have been put in place by Government.

Right. We are running well over time, but I don’t think there is anything that we can miss. Juliet, you are going to ask some questions around future preparedness.

Mr Hinton, in 2023, South East Water was found to be the worst performer for supply interruptions in the country. These figures show that no water was available, on average, for more than three hours per year, against the company’s own commitment to bring it down to less than six minutes. Parts of the East Sussex region are still officially in drought, and South East Water is the only water company in the country with customers that are still facing a hosepipe ban. Currently, Ofwat is carrying out an enforcement investigation into South East Water’s supply resilience. Taking all those things into account, can the residents of Tunbridge Wells and other South East Water areas expect further outages in the future?

There are a number of points there. I will pick up the drought question.

My question was whether the residents of Tunbridge Wells can expect further outages.

We hope not, but as I have said before, it is an infrastructure solution. We are doing everything we can with the infrastructure we have. The real key to supplying resilience to Tunbridge Wells, which is a single source of supply town, is the extra investment that we are needing at the Bewl Water treatment works down the road in Kent. That is the real fundamental change that we absolutely need. In terms of drought—that is a related but not related issue—there are very sophisticated mechanisms in the UK for managing the amount of raw water we have. And that is where drought gets decided. So how much raw water has the country got? There are different drought triggers. There are no infrastructure standards for how you run the network, such as how much storage you should have or how big your treatment works should be.

Given all the outages that have happened in Tunbridge Wells, what measurable actions are being taken now to prevent those reoccurrences?

The main one is the ability to use a different coagulant. That is absolutely going to effectively mean that we will be able to cope with any change in water in the future. We are adding additional treatment as well. That is an extra filtration step that is unnecessary but is an extra piece of belt and braces to the treatment process on the end of the treatment works as an extra resilience. Those two things would mean that Pembury remains a single source of supply, which is in itself a risk, but those two mitigants mean that the likelihood of this event reoccurring will be really low.

Okay. I have another couple of questions for you. Talk us through what proportion of the PR24 settlement is being allocated to resilience upgrades, with specific plans in mind.

Resilience was our key theme in the investment that we put in at PR24. If you read our business plan, it is almost the strapline—we need resilience in Sussex and Kent. In our original business plan, we put in £300 million of necessary resilience, which is in effect bigger treatment works, more storage tanks—treatable to storage tanks, not raw water reservoirs—and interconnectivity with main. We want to be able to move water, like from Bewl, to Tunbridge Wells. That kind of movement was in the plan. Ofwat ended up funding 60% of that £300 million. Because we need it all, it is essential—I go back to my mission—we have taken the determination to appeal at the CMA, and they have now funded more of it in their provisional determination. But we are still striving for that £300 million. I think it is essential that the infrastructure is in place; it is infrastructure that solves this issue.

How do you think that the upgrades that you have spoken about will materially reduce the outage likelihood within six, 12, and 24 months?

Infrastructure takes a while to put in place. We will concentrate, as we have done on all our single sources, on trying to stop the source failing as a primary. After that period—so 2027-28—on the Bewl scheme, when you have two treatment works supplying a single group of customers, that group of customers can be affected only when both treatment works fail at the same time. The odds of that happening are astronomically lower than if it is one single works. It disproportionately improves resilience when you have an alternative water source to the same group of customers.

So do you think the improvements that are in place are enough?

The ones that we have planned, if they are all funded, are definitely enough. We have spent a number of years refining those plans and ensuring that the resilience is in place.

Finally, will you commit to publishing a verifiable resilience plan, so that everybody is absolutely clear?

Yes, absolutely. We have resilience plans for every part of our business. That formed the underlying investment requirement that we put into our business plan. They were built on regional area resilience plans, and the Tunbridge Wells one is part of the Kent one. That is very much how we have built up the investment in the first instance.

Do you have a timeframe for that plan?

Actually, the resilience plan goes over five years, but it goes much longer than that, because we anticipate climate change impacts going forward.

Is there one in there already, or are you going to do one?

We have a plan in place, and we have started the investment.

When does that end?

In 2030—all the schemes will be finished by 2030 within the current five-year plan.

So it is a new one then.

Yes. In 2024, we created a resilience plan that went into our business plan at the same time.

Terry, you wanted to come in.

Yes, I want to follow up quickly on the point about future preparedness. Anybody watching this, particularly those who live in the area you serve, will be worried about the future. It seems to me that the risk assessment process worked, because the evidence is clear that you, internally as a company, were fully aware of the risks, and the external organisations flagged concerns as well. The risks were known, but the risk management process was clearly inadequate. Despite there being a high likelihood of risk, the preparedness was poor. I was quite surprised by pre-approved sites not being available or suitable, such as with the drinking water. The comms strategy clearly did not meet the occasion on this particular incident. You have spoken about what you are going to do in future resilience planning. Could you perhaps try to reassure us? How are we as a Committee or—more to the point—your customers going to have any confidence in your ability to deliver that resilience plan? What is going to be different?

This resilience plan is about infrastructure. The industry and South East Water are well versed in delivering infrastructure—we have delivered millions-worth of infrastructure over many years. We have actually just built a treatment works in another part of Kent that is about to go live in Aylesford. That is a huge piece of investment that we have just finished. We just started Broad Oak, which is a much-needed new reservoir in Kent. We are very well versed in delivering this infrastructure, and it is very much a priority of our business to put this resilience infrastructure in place as soon as we can and within the planning constraints of the UK, which sometimes delay stuff. A massive focus of the business is to get this infrastructure—as we call it—in the ground.

After everything we have just heard, the fundamental point for your customers is that there will be a 38% rise in their bills. By 2030, it is going to be about £339 after inflation. In that context, in respect of yours and your company’s performance, the people picking up the tab are your customers. Does that sit well with you?

That increase you have referenced is effectively the increase to drive that investment. It is the increase to drive the investment in the infrastructure in the south-east, which has been underfunded for decades.

Well, why do you think it has been underfunded? You touched on this at the beginning: you have spent more on dividends and servicing debt over the previous two years, from 2023, than on investing in the infrastructure. To give the numbers, you paid £156 million in dividends, and you paid £72.8 million in interest, while servicing £1.4 billion in debt. That is more than what you have been spending on your infrastructure, so there has been clear financial mismanagement. Again, the people picking up the tab are your customers.

I answered the dividend point earlier—it is not a dividend. The shareholder has taken no dividend for five years and does not intend to take any further dividend for the next five years, so zero dividend left the business to go to the ultimate shareholder.

It is not for now, but it would be helpful to understand the instrument, whether that went into another holding company or, if your shareholders are providing funding, what they charge you for it.

We can certainly provide that, but no dividend has left the business to go the ultimate shareholder—

But there might be a perception that your shareholders charge you what might be considered a very profitable rate of return on the funding that they provide to you.

We await your correspondence with interest.

We will follow that up with correspondence. Mr Hinton, I suspect we could carry on all day, but we have other business in Parliament, so for the moment, thank you for your evidence to the Committee. We shall, doubtless, return to this at some point. We have a further witness, so will have a swift changeover. Thank you for your attendance. Examination of witness Witness: Marcus Rink.

Good morning, Marcus. Apologies for the delay in getting to you. For the benefit of our official record and those following our proceedings, I invite you to give us your name and occupation, please.

I am Marcus Rink. I am the chief inspector of drinking water and have been so since July 2015. My responsibilities cover England and Wales.

I repeat the apology—I am not great at keeping to time at the best of times. Behind you, in the Public Gallery, are people from the communities affected, businesses and private individuals. Honestly, I just do not have it within me to leave questions unanswered, given what they have been through. Before we come to our questions to you, what did you make of that?

That is a really good question.

Just tell us.

I was disappointed. For someone who has worked for decades in the water industry and as a regulator for more than two decades, I was seriously disappointed. It is a real shame that this has occurred. It leaves a black mark on the water industry.

Academic interest here: what was it that disappointed you most? Was it the failure to accept responsibility, or the failure to treat businesses and customers fairly?

Drinking water is essential to society. It is a primary objective. Customers rightly expect drinking water to be provided all the time at the appropriate quality, at top quality. In this country, we pride ourselves for producing top-quality water—we lead the world—and we should not have a member of the team letting down us or their customers.

We have questions that we considered ahead of your appearance here today. We will push on with them as fast as we can. I hope to conclude proceedings by half past, if that is not too inconvenient. I invite Henry to lead off on reforms to drinking water regulation.

I will start with the elephant in the room, which is that the Government have said that they are going to abolish the Drinking Water Inspectorate and create a new, integrated water regulator. From your perspective, what challenges or opportunities does this represent for future drinking water regulations?

It is probably worth understanding that the Drinking Water Inspectorate is quite unique in the world. We were created in 1990 on the back of some serious incidents in the water industry, most notably the Camelford incident in 1988. You can look back in Hansard. In 1989 the creation of DWI was debated as a solution to prevent such incidents happening again. In 1988 we saw the incident in Camelford and cryptosporidium in Swindon, which were some of the largest seminal moments in the water industry. We are an organisation that has been copied. Certainly you can, as an example, look at New Zealand after the event when there were three deaths. The judicial inquiry that followed on from that also felt there should be a chief inspector of drinking water, and since then they have created one. There is something about having a highly specialist team, which we are. We are academic and industry specialists. Most of us come from the industry, so we are poachers turned gamekeepers, and that is hugely important. That is a skill that has made us remarkably successful over the last three decades, insomuch as reducing the number of incidents—sadly, we still have incidents—but also increasing our water quality to a world leading level. If we go forward, the proposal is to have a unitary authority or, dare I say, a unitary regulator—I correct myself in that respect. We feel that the recommendations of Sir Jon Cunliffe were strong, and I am eternally grateful. I am very grateful that he recognised DWI as a supremely excellent regulator among what was and is a difficult industry and a difficult regulatory set. Sir Jon recognised that there should be a number of things that we need to take forward to maintain the identity of DWI and secure the chief inspector, and I would fully support that. Some of the risks would be, for instance, the loss of the DWI identity, of the excellence and agility that we have, and of our effective organisation and expertise if we go into a very large body. The fact that we are quite small, with so much expertise and we are so specialist, allows us to be very agile and have experts who can respond to such incidents as we have been talking about this morning in South East Water. Nevertheless, there are some advantages. There are clear tensions between the regulators—between Ofwat, EA and ourselves. For instance, EA’s abstraction licensing for water resources can have a severe impact in drinking water resources. That in turn can have an impact on the water company supplying water. In Duxford, changes in water source licensing impacted the abstraction, and that resulted in the changing risks associated with PFAS. We see changes in licensing arrangements in south-east London, for instance, which will impact the resilience of London, driving some of the requirements for the larger treatment works to supply more people. So the advantages really would be that if we have an integrated regulator, we can look at source to tap, tap to sink, sink to sea and then work out the whole water resources management from abstraction to treatment to delivery. That would allow us to align our water safety and sufficiency planning, and our long-term planning, with the water resources management planning, because we may well have some influence within that—notwithstanding that we follow the recommendation of Sir Jon to have parity of DWI within the new regulator. It would not serve a purpose if DWI did not have a tripartite or quadripartite state within the new regulator, because, as we can see, drinking-water quality is people’s highest priority, and if we do not have that equal standing, the issue would be that there would be a loss of what is really important. The other thing, of course, is a closer working relationship with the financial regulator. For instance, we deal with not just drinking water but cyber-security, and we are responsible for security and emergency management—that is the emergency response—under the direction of SEMD, which brings into play alternative supplies and the duty set upon the company to risk assess and respond appropriately. The examples that we have heard about this morning were far from excellent, and they followed recommendations in an April 2024 audit of ours that focused on the inadequacy of the preparations of the company following incidents in 2023, 2022 and 2018. In fact, I counted 20 incidents that took place since the beginning of 2022 that were due to loss of supply. As we can see, there are also increasing challenges in cyber-security, and that allows us to have a more direct influence on some of the strategic, long-term, systematic planning of the industry. In our long-term planning guidance, we say that you should plan for 10, 20, 30 or 40 years—for future generations. In that respect, if we have a greater influence over the business planning, we can help that go through. We can also lend our expertise to perhaps give guidance when companies put things in their business plans that either are or are not valid. Perhaps we can bring our credibility, with our values and culture. We are seen, nationally and internationally, as a highly credible organisation, one that is copied and listened to on an international stage. I think that we would probably benefit from extra resourcing. We are a very small organisation—fewer than 60 people—if you compare us to, for instance, Ofwat. In the past year alone, Ofwat hired more than double the number of staff that DWI has in his entirety. For us, that would help with our resourcing, which has been quite challenging. Hopefully, that brings with it trust and transparency. One of the issues around regulation is that people no longer trust regulation and regulators; they do not see us as trustworthy. I completely understand that. That needs to be fixed; maybe we can help with that. One of the other things that I would like to mention is that we are an evidence-based regulator, so we can bring evidence-based regulation. When you look at Sir Jon’s recommendations, he talks about supervisory control, and we work in a supervisory system. We use a system of risk assessment and water-safety planning. We use risk-assessment methodology, and we set the guidelines for companies to work within, which is a supervisory model. It is not being a supervisor; it is about setting the model within which companies work. It is a “constrained discretion”, which I think were the words that Sir Jon used, and that allows us to think about: what are the tramlines? In fact, we have a metric that physically uses tramlines in recommendations, so that we understand what the behaviour of the company is. There is also the expertise of our inspectors. I am indebted to the highly qualified inspectors that I have. As a leader, I leave them to their discretion, and I wait for what they say and recommend to me. Yesterday, I spent a good hour listening to what my inspectors were saying about South East Water, and what their expert opinion was about that incident—it was grim listening. The point about being a leader is recognising the capability of your staff and what expertise they have, as well as being able to listen to what they are telling you and take that leadership role so that people feel motivated and that they can make decisions on their own. When you are dealing with highly academically educated individuals, you have to allow them that space to create that motivation.

Thank you; that is very helpful. Can I pick up on two things?

Please do.

First, the drinking quality of the water in England is very high. Being subsumed into a new regulator, there could be a fear that that focus gets lost to one that is consumed with bills and pollution. Is that something that you think about?

Yes, it is my greatest concern because, when you are talking about, for instance, 10,000 people from the EA, 500 to 600 people from Ofwat and 60 people from the DWI, you can see how that would disappear within a very large regulator. That is why we expressed strongly, when I met Sir Jon, that there ought to be a clear understanding that DWI should have equal status. At the moment, we are very much a sub-unit within Defra in floods and water, which causes some challenges. If we are trying to make this work, because it is about making it work and I truly want to make this work, it is about getting it right from the outset, which means recognising where the skills are, where the successes are, how we can make those successes and how we set the structure of a new regulator in a way that brings forward the benefits that I have talked about.

You also talked about transparency in your opening remarks. Are you concerned that there could be reduced transparency because it all gets done in-house, rather than having a potentially more public discussion between regulators?

Yes and no. Certainly the way we work at the DWI is that we publish all our water quality data in a report annually. The chief inspector is answerable to the Secretary of State in this respect, and we are subject, as a Government Department, to freedom of information. We will provide all the information that we are able to provide, notwithstanding that there are certain limitations with that. For example, if we are dealing with cyber-security, we obviously can’t do that or, if we are dealing with a prosecution, we need to follow the rule of law and we can’t talk about it. Bringing transparency is about the values of leadership. As a leader and as a regulator, you have to be accountable. This morning you asked the chief executive, “Are you accountable?” If you are a chief anything you are accountable. I am glad to be here to answer the questions you ask. That is about being transparent. I would like to bring that into any new regulator.

Moving on to future risks, the compliance risk index, or the CRI, is going to be tightened over the next five years. Ofwat said that will have significant challenges for operators. Given that six companies that have failed to meet their target every year since 2020, Ofwat’s fear may be warranted. You also have issues around climate change and legacy contaminants. What are the biggest risks to drinking water performance, and what does the new regulator need to do in order to address them?

That is a big question, isn’t it?

We can break it down. Nitrates and extreme weather events make water treatment more expensive. That is one of the things we talked about at length with South East Water, where it was all about investment and the need for investment, which David kept coming back to. Does the DWI have a sense of how expensive the costs will be for bill payers and whether they can be avoided?

Okay. Let us go back first to what the future risks are, and then we can talk about some of the follow-on questions. You are right: climate change is a major issue for us. The reason is the changes in raw water quality, which are inherently making it more expensive to treat, as it becomes more difficult to treat. Water availability is reducing, and therefore we have to move, or potentially move, water around. Climate change as a whole will have an impact. Obviously, there are population challenges. We expect an increase in population, and that will increase water consumption. From a water quality point of view, we have a clear understanding of new challenges such as perfluorinated chemical substances, which themselves are required to be treated. It is inevitable that, as we go through business planning, there will be a need for companies to start thinking about how they deal with those things through long-term planning. Inevitably, you would expect there to be a cost associated with that. What I think you would need to do, rather than trying to do everything all at once—dealing with population expansion and climate change—is to do it in a systematic, strategic way over a period of years, so you have a smooth rise in bills over time, rather than these big, chunky changes in water bills. Do I expect there to be some rises as a result? I would say inevitably. However, I think it should be done in a strategic way over perhaps 10 to 20 years, rather than doing it so quickly.

What about the risk in respect of the need for speed? If we think about lead pipes, for example, there are reports that 3 million lead pipes still exist across water companies, and that only 4% are estimated to have been replaced in the past five years. That is a health risk to the wider population. If you are looking at infrastructure over 10, 15 or 20 years, perhaps the population does not have time for that.

Find more money. Look, there is a solution for lead. I think 3 or 4 million lead pipes is probably an underestimate in terms of the number of homes. If you look at housing legislation, what you could do is change it so that, on the sale of a house, a surveyor would be required to inspect and identify whether the house had lead. If that were the case, a duty could then be placed on the purchaser of the house—the buyer—and that could be put on the mortgage, much in the same way as when you have a survey and then need to change windows and so on. If the survey identified a lead pipe, that cost could be put on the future mortgage. If you did that with the turnover of housing stock over 20, 30 or 40 years, you would solve the lead problem. It would cost nothing to the Administration and nothing to the water companies. It would only cost the value of that lead pipe to the individuals buying the house. That is an easily doable solution. If we had thought about that solution in 1970, when lead was banned, we would have solved the problem by now. Instead, we are 55 years down the line still talking about lead. I would encourage you to change the housing legislation and apply it on a change of ownership. Additionally, if you are thinking about landlords who rent properties, they have a duty to their tenants. Why would you not turn around to those landlords and say that they have a duty to change those lead pipes for their tenants? If you did that, you would solve the tenanted property as well. Again, that is not costing the Administration, water companies or the general public any money to change that. It is entirely possible. Returning to the PFAS issue, the water companies are not the cause; it is the industries producing PFAS who have now polluted the environment. As the drinking water chief inspector, from 2005 I have had to put a strategy in place to deal with PFAS. We have done that successfully over the last two decades by being able to put that requirement within companies’ business plans to systematically reduce PFAS. We are a leading country when it comes to ensuring PFAS are not in our drinking water at a level that the UKHSA considers you should be concerned about. We ought to consider how we deal with that in the environment and who is polluting the environment, and we ought to be chasing the polluters. As a regulator, that is part of the job. It is not my job at the moment, and may not be the job in the future—who knows—but my job has been to ensure that drinking water is secure from PFAS, and I have done that.

Do you think that there should be bans or stricter standards?

I do, actually. PFAS are incredibly useful chemicals, but there ought to be consideration of what you are using them for. We do not necessarily need to be using them on cardboard food containers, in cosmetics or on materials such as flooring, car seats or things like that. They are everywhere. Of course, we need these useful chemicals in medical devices and so on, but we need some restriction on them. The issue for a regulator is that you must be quite careful about what you are restricting. For instance, we have restricted PFOS and PFOA. We know that PFOA is a dangerous chemical—it is designated a category 1 carcinogen by the WHO. The issue is that chemical companies are also quite clever. If you ban a particular PFAS, they then split it down so that you end up with a new species. You have to be holistic and strategic about how you do this. When I was looking at the water supply, we were seeing PFOS and PFOA. Now, we are starting to see the emergence of PFHxA, which is a newer generation of PFAS, and that is because of chemical engineering. That creates even more challenges. For instance, if you had PFOS, you could remove that largely by GAC. However, smaller chains become much more difficult to remove and that becomes much more expensive, so we need a much better holistic strategy about how we go about that.

I am conscious of time, but in terms of the raw, untreated water, you talked about the regulator and there being no regulations on the safety of pre-treatment water. Is that something that is on your radar?

It has been on our radar for some time. We look upstream. We may be the Drinking Water Inspectorate, but we look up at the catchment and have put into place catchment management requirements and notices for water companies. We collect the raw water data at the point of abstraction, and we look at it and that forms our risk understanding of what companies are having to treat. It is an upstream methodology. Becoming an integrated regulator would partly help with better sharing of that information, but we do look upstream. There is no regulation, but we expect companies to do it under their water safety planning, and they provide us with the data. We have all that raw data—1.7 million lines of risk data—which we analyse because we work with a proactive methodology to identify risks before they happen. Not all risks—you cannot remove all risk. This goes back to your question around CRI. CRI is a risk index. If you get in your car and drive 100 miles, you have a risk; there are odds on whether you have some kind of accident. It is one in 37 times, I believe, but do not quote me on that figure—I think I heard it from a bookie somewhere. The reality is that you have to understand that there is always a residual risk. The objective for us is to try and mitigate down that risk. Sorry—

No, I am just trying to make a bit of progress. I have two more questions for you. What you have been saying has been gold dust, but I am conscious that I have taken half an hour, and the Chair is probably giving me eyes—I am avoiding looking at him.

I am enjoying it.

On microplastics, in respect of there not being any standards, I appreciate that there is no recommendation for them from the WHO, but what is your organisation’s perspective on that?

Great question. We carry out lots of research; we have done research on PFAS and on microplastics. I would love to turn around and say that I want standards—and I have been driving for an update in the drinking water regulations for some time now. In terms of microplastics, the research that we have identifies that microplastics in raw water, much of it coming off the roads, is well removed by the water treatment process. If you think about it, water treatment processes are intended to remove particulate matter—that is what they are designed to do. In fact, we find that a typical water treatment works of clarification and filtration will remove about 99.99% of microplastics. So when water leaves the works, the number of microplastics is remarkably low. It then picks up microplastics in plastic pipes in people’s domestic plumbing and so on. What risk does that pose? We know that microplastics are reduced well down at water treatment works, and there is no evidence that we can see at the moment—or certainly that the WHO indicates—that those microplastics have an impact on health. We have to be health based. On one hand we are precautionary, on another hand we are health based, and on a third hand we are risk driven. If the evidence indicates that the risk is low, both from a process and a drinking point of view, then you would have to start thinking about the merit of putting in an additional requirement for testing. That does not mean you should not test for it; in fact, you might argue that it would be a good thing to have some operational testing going on, so that we start to understand it. That was the methodology that we started thinking about way back in 2015 when we were thinking about PFAS, because we said, “We don’t know what the question is, and we don’t know how to measure PFAS properly.” We started out by asking, “How do we measure it?” and we commissioned research for it. We then said, “Now we need to know what the problem is,” so we asked companies to do that for us. We collected 1.5 million data points on PFAS over the last two or three years, so we have a really good understanding. It might well be that we should turn around and do a bit more research on this, but we need to prioritise what we see as urgent. PFAS took a higher level of urgency for us to understand what the problem was, if there was a problem, and to put that into business plans, whereas the research is not indicating the same level of risk associated with microplastics.

That is very helpful. Finally, taking a step back from everything, has the work of the Independent Water Commission stalled progress in respect of other changes that could have been made for drinking water?

That is another great question. It is all about priorities, isn’t it? If I had my wish list and my magic wand, I would just say, we need an update of our drinking water quality regulations. I would argue that we need to put regulations in for sufficiency, and I would argue that we need to have grey water regulations for safe delivery of grey water within domestic and industrial premises. Those are all things that I have said or written to the Secretary of State about to say that we should be doing them as a regulator from a strategic point of view. Do I recognise that there is a crisis in the water industry and a crisis with regulation? Of course I do. I think the Independent Water Commission was an important piece of work, and because of that, it is necessary sometimes to de-prioritise other areas. I would love all our stuff to be done straightaway, but sometimes one has to be realistic about things. Has it stalled it? Maybe. Is there good reason? Probably. Am I patient? I definitely am.

Henry has covered pretty much all that I wanted to ask. There is just one small thing about the weaknesses in the supply chain. I was reading about the availability of sodium hypochlorite to disinfect drinking water. Do you see the availability of these things in the supply chain as a weakness? Do you think that needs to be strengthened? Do you think that our reliance, apparently, on only one source is a problem?

That is a reality of manufacturing, in that something like sodium hypochlorite all goes to one point, and that creates a weakness. As an administration, there is a real responsibility in protecting what is really important and what the public really values. From my point of view, if you look at the amount of, for instance, sodium hypochlorite or chlorine that the industry uses, it all comes from the same source. It is a tiny fraction—it is like 1% of the total chlorine. Same with carbon dioxide, which is used—it is a tiny, tiny fraction. I suggest that there should be clear expectations and legislation around the protection of that supply for the critical service. I accept your question of whether it is critical and whether there is a risk there. The answer is yes and yes. What do we do about it? We need to ringfence that supply.

It could be considered almost a national security issue, then.

I would argue that it should be the highest priority. We have dealt with chemical incidents relating to chlorine or coagulants. There have been a few instances with coagulants over the years—I mean in the supply chain, not the situation with South East Water, which was completely different. Because the industry does not have the purchasing power, I would argue that there needs to be ringfencing around these critical supplies and critical infrastructure that are important to the public.

My revised timescale is now shot dead in the water as well, but we will carry on, if that is okay. Terry, you are going to take us back to some of the areas that we have dealt with already this morning.

I am conscious of time, but I did want to go back to what I am sure is on many people’s minds this morning—the point about water emergencies. I am going to dwell on this morning’s session for the rest of the day, I think, to be honest with you.

Why not?

I think it is fair to say that there are a number of companies that are struggling to prevent supply interruptions and that are probably struggling to respond quickly to outages. In the role that you do, and you have been doing the role for a while, I would imagine you have excellent oversight of the industry as a whole. How well do you think the sector prepares for emergencies? How concerned should we be?

I think it differs from company to company. On the whole, I think the water industry does quite well. It is inevitable that there will be events and emergencies. The most notable event that I can recall was in Mythe in 2007, when the water treatment was flooded. That was no fault of the water company there. That took the entire supply of UK bottled water in five days. That is the magnitude of the supply of water. Compare sales of bottled water in the UK, which I believe amount to about 6.5 billion litres per year: that is half a day’s supply for drinking water. The importance of getting this right, and being prepared, is high on our agenda. We are responsible for the security and emergency measures direction. That direction covers physical security but also, as we saw this morning, the response to incidents where alternative supplies are required. Some companies are responding to that by buying quite substantial fleets of water tankers for water quality incidents. We think that the industry is better prepared now than it ever has been. Is there a likelihood that something will happen? Of course, things do happen. Will people be out of supply in the future? I hope not. The realist in me feels that there will be such incidents. Do I think that all companies are ready for that? No, I do not. Do I think that some companies are? Yes, I do.

I am pleased to hear that there are good practice examples, but how have you and your organisation worked with those companies that are perhaps not prepared? How have you given advice and supported them to plan for those worst-case scenarios? What role is there for you to try to get them where we want them to be?

We use a risk-based methodology throughout, whether for cyber-security, physical security, emergency supplies or water quality and so on. Our expectation is for companies to carry out a risk assessment. They carry out standard RAG assessments that cover preparedness, volume of supplies and planning—which should have been part of it. That is planning for those supplies, exercising those supplies and so on. Each company provides that risk assessment to us. We then go through a step of verification. My team who deal with SEMD will go out and audit the companies. For instance, we audited South East Water in 2024 and gave it five recommendations in alternative supply on the back of 2022-23, 2018 and the 20 other incidents that were associated with it. Where a company is not complying, we have powers under section 18 of the Water Industry Act. We put in place enforcement orders and our expectation is that companies will meet the requirements of any enforcement orders. That does not always happen. We would like to make the sanctions around section 18 a little stronger. For instance, if a company does not meet the requirements of a final enforcement order, we are required to go to court to show that it has not met those requirements. Unfortunately, the court process is quite slow in some respects. We have a case, for instance, that is six years old. We would like to try to put in civil sanctions associated with those powers to encourage those companies that are slightly behind the curve—and there are a few—to be up with the leaders in the industry. It is a combination of what we do and how we verify it, but there is also potential for the future in making those encouragements a little more tangible.

You touched on South East and the Tunbridge Wells incident. I read your 2024 risk notice. There clearly were warnings—as I mentioned in my comments earlier—but I was not clear to what extent that was followed through. Presumably the recommendations were not all implemented. I was not sure if you got to the enforcement notice stage on those specific incidents, so why were you not able to enforce the necessary changes that you clearly identified in that particular case?

We do rely on companies to take certain actions. The situation in Tunbridge Wells and Pembury works was a classic. If I had lots of time, I would explain it a little more to you. The reality is that it should not have been a surprise. There was nothing unusual about this works, about the turbidity upstream, about the source water, or about the alkalinity or pH level. In fact, there was absolutely nothing unusual at all. There was nothing unusual at all even about the chemical. The issue for us is, if there was nothing unusual, why did that go wrong? Remember that my scientists have looked at 1.2 million pieces of systems control data—50,000 samples and one year’s worth of records. We have gone back two years in terms of records. In the notice, we asked for the company to carry out jar tests. A jar test is a bench-type test: you test the efficacy of the coagulation to see whether it has worked. The reason is that you need to optimise that coagulation. It is really important that you optimise it, because if you have levels of alkalinity and pH, sometimes the coagulant does not operate unless you optimise it. Part of understanding that optimisation is about doing those jar tests, and part of the notice said that the company should do those jar tests. The company did two jar tests in the last 12 months—the last one in July.

Can we just be clear about this? Mr Hinton’s evidence was that this was something extraordinary and unforeseeable. For the benefit of the transcript, you are shaking your head.

I need to be absolutely clear about this. I have had two scientists—we are talking highly qualified, post-doctoral process scientists—working on this. I spoke with them. We have identified that Pembury works had been operating sub-optimally for weeks and months prior to the event. There is clear evidence of poor filter performance, inadequate coagulation management, reduced backwash capacity, reliance on manual interventions, and a lack of online performance visibility to enable a critical assessment and response. They were flying blind. There was no electronic collection of data on coagulation. It was fixed manual dosing, which meant that if the flow of water changed, the dosing remained the same and the concentration changed. The DAF filters were not washed adequately. The backwash system had a passing valve into the dirty wash water tank. From January, the site was shutting down, following a GAC wash. As I have said, the chemical dosing was not visible on SCADA. The lack of online data for coagulant flow and dose means that there was no way for the site operators to notice or intervene in coagulant dosing injector blockages, should they occur. They had no idea. The process scientists responsible for the site were not available—they were sick—so there was a stand-in scientist working there. The filter performance drops away on DAF filters at various dates. In the opinion of my inspectors, the start of the incident was 9 November.

It was 9 November?

It was 9 November—I repeat that.

Almost three weeks before the actual event.

There was a noticeable and cumulative deterioration of all vessels from 19 November through into the start of the event, and this is seen in increasing turbidity. Picture this: the coagulant was sub-optimal, so it was not creating coagulation. The aluminium was going into solution, and that was then hitting on to the filters. The filters were then working sub-optimally, and they were passing through the aluminium to the GAC. The GAC was catching that aluminium. When the company came to backwash the GAC, that was where the puff of turbidity was coming from—on the backwash of the GACs. The GACs were becoming unmanageable. The consequent result of that was that the washwater tank was filling up, the washes were getting shorter and they were becoming less effective, and turbidity in the filters was going up, until there was a point of crisis. There was a blocked coagulant line on 26 November. We cannot tell, because there is no online data, whether that coagulant dose or the absence of that coagulant dose interfered or accelerated the circumstance. Nevertheless, the works collapsed. The circumstance was that the treated water reservoir was going down over that period of time until the point at which there was a loss of supply. When that happened, the company were trying to restart the works, but they could not do that. You heard about trying to get a new coagulant. The opinion of my inspectors is that, had they done the appropriate jar testing and had the appropriate data, the original coagulant chemical would have worked. They have replaced that with a newer coagulant that is more effective and efficient, and therefore you would expect that to deal with the issue. We asked—we enforced against a notice—for the company to put a microfiltration unit after the GAC. That was to stop any residual aluminium bleeding into the clean water tank. The company has not fitted that, to date. We have subsequently put in place an enforcement order for that. We have no further sanctions to deal with this. The regulations do not provide us with the adequate facility to do that. The company has used a very rarely used clause within the regulation to allow a “boil water” notice to happen. That means that the requirements of the regulations fall away because it notified the consumers what they must do to protect themselves, and so the requirements of SEMD fall away. As a regulator, therefore, we have few options to find that the company has been in breach of the regulations. That is why I am speaking more openly to you today, because we do not feel that we have a potential pathway under the current legislation that allows us to sanction the company under sufficiency, because the regulations do not have a sufficiency clause in them. In fact, the company said themselves to my inspectors, when we asked for the water sufficiency planning, that we did not have the legislative power for it. Initially, they refused to give us the sufficiency planning for that. They have provided it since. We have put into a place guidance around water sufficiency planning, which we are expecting the water companies to adopt over the next year or two years, to set those standards more clearly, based upon our risk assessment methodology that we have in place. This event exemplifies the reasons for what went wrong and why it went wrong and the culpability associated with that event, and the reasons underneath why that event happened. As I say, I am more open than I might otherwise have been when we are looking at an event. I am very thankful to my team for the hours and hours they spent on site interviewing the process staff there, looking at 1.2 million pieces of data and 50,000 sample results. The value of DWI as the last line of defence is exemplified in this one event, where the public feel that there has to be accountability when things go wrong. Have I expanded too much?

No, you haven’t—I am very grateful for your candid response. It is incredibly useful, and I am sorry that the warnings were not listened to and acted upon. I am keen to get your view on this: are you concerned about the likelihood of the incident being repeated?

Yes.

How likely, and how soon?

It is difficult to say. My team are still working on this. The issue is that that particular site has filters that are 30 years old and undersized. The GAC, in the company’s own report, is undersized; it does not have an effective contact bed volume. The ability to oversee the site is lacking. There is no systems control telemetry associated with the coagulation. It is a manual stroke device. The site is only manned Monday to Friday during the day, so the site could go wrong overnight and there would be nobody there—and there is no control room that can see that. We recommended in previous audits that the company should have control of it. We recommended after 2022, 2023 and 2018 that the company should have a response system that takes in the learning. We could not find any evidence in our audit of April 2024—our SEMD audit—that that learning had been found. We were concerned about it, and we have put that in the report. We created five recommendations. One of those was to carry out testing and exercising the very things that you were asking about this morning, about rolling out the response. We will put that in our report. It will not be pretty reading. That does not mean that all the industry is like that. It does not mean that we do not have a fantastic water industry. We do: we have a lot of people who are working very hard to make it right and to provide good-quality drinking water, and we are-world leading. Let us keep it that way. Let us not allow one of the team to let us down, when we have some fantastic water companies that do their job.

The last point that I wanted to make was about the response aspect to the incident. Prior to having this role, I was a county councillor. I sat on the audit committee and we assessed risk. The probability of risk in this circumstance was incredibly high, which is why I was so surprised about the lack of preparedness for it happening. What role does DWI play in the response to an incident? Do you provide any guidance and support? Do you think, given the likelihood of an incident, that the response was adequate?

Let us go backwards through those questions. Was the response adequate? No. We said that their response was not adequate the last time, and it still was not adequate this time. Could you just go back through your questions again?

What role does DWI play around preventive advice, and how can you advise the industry to prepare for these incidents when they happen?

As a regulator, we have to be slightly removed, but we do put guidance out. In terms of security and emergency measures, there is guidance that sets out how much they should supply: 1.5% of the population. There is guidance about how much water they should provide: 10 litres in the first 10 days. We will look at that. We do provide guidance to water companies, and our expectation is that they will follow it. The issue in this instance is that companies do not always follow the guidance. For instance, companies were under an obligation—South East Water was under an obligation—to have a risk assessment. They carried out a risk assessment themselves. It was all green. We audited them, and that risk assessment changed after we audited them, both for SEMD and for water quality, so there was an element of risk normalisation.

On both aspects, the advice you gave on preventing the incident from happening completely was ignored. It also sounds as if your advice on what to do if it were to happen was not acted upon either.

Yes is the answer.

Mr Rink, can I just be clear about this? You have given us a very detailed explanation about the conclusion of your inspectors’ investigations, so the Committee now has a clear understanding of that. Had you shared that with South East Water before today?

No, because large parts of the information were from South East Water themselves. They provided their 20-day report to us, which did not contain much of that. That information has come from the company’s own data, and from us visiting their site twice with our inspectors.

Are you satisfied with the level of candour and co-operation that you have had from South East Water?

That is a great question.

It’s what we do.

We are a tiny organisation, and it takes a huge amount of our resource to respond to such incidents. If you think about it, where I have sent two or three staff—or, on SEMD, four staff—and where I have had support staff, that is about 10% of my staff dealing with this one incident. We do not have a huge amount of resource, and there is an expectation that we do more of this. What I would prefer is the companies to be more open in the information they provide. We should not have had to go out and find that.

To be clear, you have joined up the dots, and South East Water provided the dots, if I can labour the metaphor.

The information was available to them.

I am left feeling that the Committee, perhaps, has been approached today by South East Water with a lack of candour. Tell me, in your professional opinion, if I am being unfair to them.

I think that at no point have you been unfair.

Thank you for that. Josh will come in on drinking water quality across the water sector.

Thank you, Marcus, for your time this morning and this afternoon, and thank you for your candour in your responses. Your evidence is genuinely going to be very useful to us. As you said, against a backdrop of a sector with a lot of problems, the quality of public drinking water has remained consistently high over the years. I think your most recent annual report showed a compliance of 99.97%, and Britain is a world leader on this, as you said. What do you think sits behind that success? What are we getting right?

That is a massive question. How do I condense this down to about 30 seconds? It is a combination of knowledge, skills, expertise and the values that people have within the industry. Honestly, the people working in the industry are genuinely great people. They work hard to provide a service. I think a comment was made earlier that you should never look at the people within industry and deride them or put them down, because they will have spent their Christmases—this Christmas, this new year—trying to get it right, and these people in South East Water will have been trying to get it right as well. There is a willingness to get it right. I think there is something about our regulatory structure. I would say that our water quality regulation is right, because we have a very clear system of proactive, risk-based, data-led expert regulation that drives the company to achieve the standards that we set. We are really clear about it, and as a set of regulators we are experts. In fact, I would argue that the two experts I sent to South East Water were more expert than the South East Water experts.

Manifestly.

Because they were able to see the absence of optimisation. When I spoke to my inspector yesterday, she was animated about the fact that it could not be seen. It is a combination of good regulation, excellent regulators and companies willing to do the right thing and have the core values. For the majority of companies, that is the case—they want to do the right thing—but that does not mean that you as a Committee should not exert that pressure. You are absolutely right to be exerting that pressure, whether that is on a company or on me as a regulator. I welcome being held to account. Our excellence is part of the system that we have—this accountability, this transparency—and we have got it right, but we have to make sure that we do not take our foot off the pedal. If we do that, we will go backwards.

Absolutely. It is great to hear that we have some of the best minds holding the water companies to account and keeping them honest. It is concerning that, whether through incompetence or a lack of transparency, you are uncovering, even with a small team, instances in which things are not being done and the rigour is not there when it should be. On the other side of the picture—the 0.03% non-compliance—we know that since 2020 there has been an increasing number of water quality events in which tap water was likely affected. I think the number of incidents is higher at this point than at any time in the last quarter-century. Why do you think we are seeing those numbers rise? Are you noticing any trends that we need to be aware of and to focus in on?

If you have an expert regulator that really knows what it is doing, you cannot push it under the carpet. We rigorously identify, from 4 million data points, where the risks are, and we go out and find them. If you go to look for it, you find it. What you are seeing is a residual outcome of the methodologies we are using to find where there are shortfalls, so that you cannot push it under the carpet. That is where the expertise is so important. The number of incidents does not actually reflect the true improvement in the industry. For instance, we have had occurrences of cryptosporidium in recent times, but if you think about it, you can name where they have occurred. You will be aware of the recent one, but the last ones before that were in 2012, 2007, 2005 and whatnot. The number of cryptosporidium events over the last two decades, together, is less than the number of events in any given year—one year—in the ’90s. The industry has progressed remarkably, but the number of low-level incidents has increased. It is a bit like health and safety, where you have the pyramid. You are getting more reporting further down that pyramid so that you understand, because the more you understand about those low-level incidents, the more prepared you are to prevent the big incidents. While we are seeing a rise in small incidents because we are finding more, we are seeing a reduction in the number of big incidents. I can count on one hand the big incidents that have happened during my time, since 2015, whereas I did not have enough fingers and toes in the ’90s. That is down to the change in methodologies that a regulator uses to interrogate the data—the 4 million pieces of data and our 1.7 million lines of risk assessments. We expect the companies to do the risk assessments from source to tap, and then to tell us about it. We then say, “Well, there are the risks.” Or we turn around and go, “There are no risks there,” so we go off to Tonbridge and ask, “Why are there no risks there, apparently?”

You have referred to the fact that not everything is within water companies’ control—there could be groundwater contamination, or a third party could be involved—but around 45% of incidents are within their control. Do you think that is an acceptable level? What more do you think the companies could be doing to control the things that they can control, especially at the lower level you just referred to?

The reality is that when I look at the data, you are right: about 30% to 45% are within the company’s control. I would say that about 25% to 30% are own goals—for example, the company did not optimise the coagulant or carry out an appropriate risk assessment. So our objective is to embed in the companies that risk assessment methodology. We have been driving water safety plans—we are world leading in water safety planning risk assessment methodology and how we measure that—to peel away the leaves and give us an understanding of how companies could improve. My inspectors spend a lot of time looking at those risk assessments and proactively going to the water industry to challenge where the companies could improve and how they could improve those events. We are driving down the number of bigger incidents.

Do you think those messages are getting through to the water companies? You just told us that South East Water, certainly, carried out risk assessments that were not reflective of the reality.

It is a mixed bag. We have some really good leading companies, which spend time, money and investment. We see companies that put their hands in their pocket and put in investment. We have seen some really great innovation—for instance, at Witches Oak, in Severn Trent, they literally said, “We are going to use nature-based solutions and unused water, such as in the gravel pits, to support resource and resilience.” That is brilliant. I quite like that. With other companies, South East Water was a company of concern for us. We have started moving. I had a meeting with the chief executive, and my staff have as well, as we moved it into transformation. We had previously identified that the company was underperforming, so we considered that it had gone outside our discretionary limits and we were starting to apply regulatory requirements around notices for them. It was moving into transformation because it was moving up the risk register—quite dramatically, actually. Not all companies are in the place that they should be. We need to work on them, but we also need the co-operation of the companies. We may need the co-operation of our Administration to help us find the right tools in our toolbox, or to add some tools to our toolbox, to enable what is a small regulatory team to be even more effective than we are.

What would those tools be? What would help you get best practice out to companies that are not performing well?

I have thought about this and I wrote this big, long list, which I do not think will be helpful—

If you wrote to us with it, that would be great.

We can supply it afterwards. There are things about regulatory reach. We cannot reach third-party contractors. For instance, we cannot touch changes in the water market like direct procurement or design-build-operate. We cannot touch the builders or the constructors. We cannot touch the water retailers or alternative water suppliers, all of which provide water that is there for human health. We have a duty of sufficiency between sources, but no secondary legislation under that. We would say that we need that. We need to make sure that our drinking water sufficiency plan—with our drinking water safety plan—is embedded in legislation. We do not have the necessary guidance or regulation under alternative water supplies—grey water—or water fittings regulations. We do not have powers to prosecute or to fine under SEMD. We do not have powers of entry to deal with security; bizarrely, we have powers under water quality, but not under security and emergency supply. The water quality regulations are out of date. In terms of the powers, the fines, no civil sanctions are available. There are no powers, for instance, for DWI to deal with local authorities and private suppliers, which cover 1% of the population. In terms of the housing regulations, I talked about lead. We have not got reach around housing regulation, or the grey water systems that are going in, to make sure those are put in safely. Some of the recharging—in terms of the fees we recharge—does not give us wide enough scope. On failure to comply with enforcement orders, we do not have scope to deal civilly with that. Provisions are spread on misinformation, such as filter manufacturers saying drinking water is lousy when it is not, and then selling their products on the back of misinformation. On action to deal with pollutants such as PFAS, we do not have powers to deal with those. We cannot enforce against fluoridation or lack of fluoridation or control of fluoridation. That is a matter for the Department of Health. We do not have the ability to define what “wholesome” is or what “domestic purposes” are. This is not just about drinking water quality. You need it for heating systems. Who thought of that? There is the question of clarification on the prosecution lead in relation to, for instance, illegal connections. You have people connecting into the water supply. Dare I say Clarkson’s farm connected into Thames Water as onward distribution for his pub? He did a deal with the local farmer, I understand—allegedly.

It was in the programme.

It was in the programme. There are no powers around that. Companies are the regulator for fittings—really. They are a regulator. Might there not be a conflict there, particularly if the company decided that there was an issue around that? I can go on.

Let me just say that this Committee does its business slightly differently from other Committees: our inquiries never close. I am loath to say this, because I am enjoying every second of this, but if you want to give us a full, detailed note of that, we can certainly take it on and make very good use of it.

My great team in the public gallery will be happy to follow up on all those things.

Can I pick up one final point? It is something that you mentioned then, Marcus. I can tell that you are a man who deals in facts and data, but we know that perception can often be just as important, and public perception of the safety of our drinking water is on a downward trend. Perhaps it is a symptom of declining trust in institutions in this country in general, but we know that that is happening, and increasing numbers of people are turning to, as you said, bottled water, perhaps in the belief that it is safer and healthier. It even has fewer microplastics, we have heard. To what extent do you think that that is down to some of those high-profile water incidents that you mentioned, or do you think it is related to other things?

You are right. I love my tap water and I will fill up my bottle. When I go to an airport, I will find the nearest tap and fill a pint, because I have real confidence in tap water. I hate using bottled water; I won’t buy it, just on principle. Even if I am dying of thirst, I won’t buy bottled water. Look, it’s about confidence and trust. If you have situations where you are being told something, and then it turns out to be something else—look, any salesman will tell you, and I am not a salesman, that it takes ages and ages to gain the confidence to make a sale. If you make one mistake, that customer will leave on horseback. The issue is that customers want to leave on horseback and they can’t. That creates a level of dissatisfaction. The issue, therefore, is that people lose trust in the companies. They do not believe what is being said. A whole number, a plethora, of issues are culminating in that. We are talking about things like storm overflows. As the data for storm overflows becomes more available, people start to understand; there is greater communication between people to understand that data—citizen science and so on—and people lose confidence and trust. And when you lose confidence and trust, you lose confidence in drinking water. That is where we are. Then, unfortunately, we have people who take advantage of that. What we are seeing is a sharp rise in advertisements for under-sink filters, which honestly I wouldn’t drink from, because you do not know what plastics that has been made from. They are not approved. Yet you have leading celebrities promoting filters. It is shocking, and you see it all the time. So what I would say is that, as an industry, we have to go further. We have really got to work harder, as Administration, regulators, and companies, to bring that confidence back. When you look at the international figures from the Yale environmental performance index, we are among half a dozen countries at No. 1, so why shouldn’t people be confident in their tap water? It is a complex issue, and we need to work harder.

You are right. In an age when there is more publicly available information, as you said, on things like storm overflows, as well as more misinformation on social media, there is a question for us all as to how we can leverage social media to get the positive story out there: that we have very safe, world-leading tap water. We should be proud of that and confident in it.

We should be proud of it, and we should not let these incidents let us down. When you look at South East, that was by no means the biggest ever incident. It was not a huge incident. It actually should never have happened. When that overtakes everything, we have kind of lost something, haven’t we? The day I became chief inspector, we had Franklaw. The phone rang, and the chief executive, Steve Mogford, said, “Marcus, I’m afraid I’ve got to tell you something: we have a problem at Franklaw.” Some 670,000 people went on a “boil water” notice for six weeks. That was my first experience as chief inspector. Luckily, everything else has been a bit more simple since then. South East was a relatively small incident. It was big to the people; don’t get me wrong—those customers and businesses were deeply affected. This was not a trivial incident, but in the grand scheme of things, it was relatively small. But it should never have happened. When these incidents occur, the confidence of the public is lost, so it behoves us to make sure that we stop these incidents happening. Part of that is deciding how climate change is affecting these treatment works. It was not affecting the treatment works in this instance. With the increasing population, are treatment works undersized? We have examples of undersized treatment works that need to be dealt with. How do we deal with the abstractions? We are losing sight of the balance between abstraction and water supply, so we need to think about how that is done. How do we deal with the expectation of power showers, and with the 140 litres that people are using, most of which goes down the loo? Why are we not thinking about catching the rain that falls on our roofs and using that? What about data centres? Why are we not thinking about where we get the water from? One of the things I have said is that we should not think about where the next water treatment works is; we should think about where the waste water treatment works is, because you can treat that to a standard that is suitable for industry. Why are we sending drinking water to industry when we do not need to? These are all strategic things that we need to talk about. That comes within sufficiency, resilience and resources. We need to join those up and think strategically about them over 10, 20, 30 or 40 years. It is not for me to say this, so please excuse me, but I would encourage you to perhaps start thinking about some of those future challenges and strategies.

Marcus, I have been a Member of Parliament for 24 and a half years, and I have seen some genuine mic drop moments in that time, but I do not think I have ever seen a mic dropped in such a calm, measured and professional manner as you have shown the Committee this afternoon. I have a sense that you came to the Committee keen not just to deal with the issues that we have raised, but to get the message across that the work of the Drinking Water Inspectorate is important, that it is the part that works, and that that should not be lost. We will be closely involved in the scrutiny of next steps in relation to the White Paper and the next water Bill, whenever it comes. Without prejudging anything that my colleagues around the table might say, I think it is fair to say that you have well and truly got that message across.

Thank you.

Thank you for your evidence today, and I thank you and your inspectors for the work that you have done. Sitting behind you are a number of residents from Tunbridge Wells, who I think will want to demonstrate their gratitude to you and your staff. For the moment—having demonstrated, beyond any measure of doubt, my inability to run a Committee session to time—I will conclude proceedings. Thank you for your attendance and your evidence, and I thank my colleagues for their forbearance.