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South East Water’s management should be sacked over repeated supply outages and maintenance failures and shareholders in the utility must also take a “share of the blame”, MPs have said in a damning report.
The House of Commons environment committee said on Friday that it had “no confidence” in the chief executive and board of the water supplier for London’s commuter belt, criticising a “clear pattern . . . of blaming factors outside of their control”.
More than 300,000 customers had been hit by several water outages since 2020, including a two-week stoppage before Christmas last year that forced 30,000 households to turn to bottled water for all their needs, the MPs said.
Meanwhile, the company had ignored calls from sector regulators over the past four years to invest in and maintain infrastructure, they added.
Chief executive David Hinton, who was paid about £460,000 in 2024-25 but has agreed to waive his bonus this year, has previously blamed water supply failures on climate change and an increase in remote working since the coronavirus pandemic.
But the committee said executives should have “factored these into their long-term plans” and that they had “failed to sufficiently plan for critical periods”.
David Hinton, chief executive of South East Water, gives evidence to the environment committee earlier this month © House of Commons
“South East Water presents as a company devoid of proper leadership, riddled with cultural problems,” the MPs said. “Leadership teams play a major role in how company culture develops; culture change at this scale requires South East Water’s leadership to change.”
Although water regulator Ofwat’s decision not to allow South East to raise customer bills sufficiently in the past may have made investment decisions more difficult, it was ultimately the company’s responsibility to maintain and improve assets, the MPs said.
“This suggests shareholders also deserve a share of the blame,” they added.
Through its holding company, the group is owned by the Utilities Trust of Australia, which has a 50 per cent share, Canadian financial group Desjardins, with 25 per cent, and the NatWest Group Pension Fund, with 25 per cent.
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The utility — which serves about 2.2mn water customers in Kent and its surrounding areas — has breached several of Ofwat’s licence conditions as well as the Water Industry Act 1991. The legislation requires it to maintain infrastructure to deliver adequate water supplies.
Although Ofwat is consulting on a £22.46mn fine for repeated supply outages between 2020 and 2023, no water company has ever lost its licence despite several breaches.
South East Water has a £1.3bn debt pile and paid out £1.2bn in interest and dividends between 2011 and 2025 — almost as much as the £1.5bn it spent on its capital investment, including pipe networks and storage capacity, during that period.
South East Water said it was “carefully considering” the report by the Commons environment committee.
The company has previously said no external dividends have been paid since 2019 and that “interest payments are a normal cost of doing business”.
NatWest Group Pension Fund said: “We have consistently expressed our views to members of the board that they must address the issues facing the company, including the issues of governance and leadership.”
