South East Water, which supplies 2.4 million customers across Kent, Sussex, Surrey, Hampshire and Berkshire, said in its annual report published 17 July that it has funds to last until July 2027 but will need new loan facilities shortly after to continue as a going concern. It has also agreed a £30.5 million redress package with Ofwat. |
LAST REVIEWED: 19 JULY 2026
KEY FACTS
- The annual report published on 17 July says funds last to July 2027, with new loans needed shortly after to continue as a going concern
- Lender discussions are described as at an advanced stage but are not legally committed
- A £30.5 million remediation package was agreed with Ofwat on 14 July, funded by shareholders not customer bills
- Supply incidents in December 2025 and January 2026 cost £54.7 million and left more than 77,000 customers without normal supply
- The chair and chief executive both resigned following criticism of the incident response; an independent monitor will oversee the company
South East Water has warned that its future as a going concern depends on securing new borrowing, in one of the starkest financial disclosures yet from an English water company. The supplier's annual report, published on Friday 17 July, states that the company has sufficient funds to make it through to July 2027, but that shortly afterwards it will need new loan facilities in order to continue as a going concern. Discussions with lenders are described as at an advanced stage and expected to conclude over summer 2026, but they are not legally committed.
The company supplies drinking water to 2.4 million customers across Kent, Sussex, Surrey, Hampshire and Berkshire, and carries a debt pile of around £1.7 billion. Its owners, the NatWest Group Pension Fund, the Utilities Trust of Australia and the Desjardins financial group, injected £200 million of new money in May 2025 following £75 million in December 2024, but the company subsequently lost its investment grade credit rating when Moody's downgraded it to junk status.
The warning caps a bruising period. Two major supply incidents in December 2025 and January 2026 left more than 77,000 customers with no water, low pressure or intermittent supply following leaks, bursts and storm related power failures across Kent and Sussex. The company puts the cost of those failures at £54.7 million, covering customer compensation, bottled water distribution, emergency tankering and recovery work. Schools closed and households reported difficulty managing childcare and medical needs. Chair Chris Train and chief executive David Hinton both resigned following months of criticism of the response.
Days before the annual report, on 14 July, Ofwat announced that South East Water had agreed a £30.5 million remediation package following investigations into repeated supply disruptions, poor customer service and the rating downgrade, which placed the company in breach of its licence. The regulator has stipulated that the £30.5 million comes from shareholder funds rather than customer bills, and the company must also pay for an independent monitor to oversee its turnaround. The package sits on top of a proposed £22 million fine for supply failures between 2020 and 2023 that affected more than 286,000 people.
Customer research published by the Consumer Council for Water in June found fewer than one in ten affected customers were satisfied with how the winter incidents were handled, with communication the clearest failure, and around half of Priority Services customers saying they did not receive the support they expected. Roughly half of affected customers now say they store bottled water at home in case of future incidents.
For customers, the immediate position is unchanged: water continues to be supplied, bills remain payable, and statutory guaranteed standards payments apply automatically for qualifying interruptions. Households with medical or accessibility needs can register for the Priority Services Register at no cost. Were the company ever unable to finance itself, the sector's special administration regime exists to keep water flowing while a restructuring or transfer takes place, meaning supply does not stop because a water company fails financially.
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Disclaimer
This article is for general information only and reflects sources available at the time of the last review date shown above. It is not financial, legal or travel advice. Details can change quickly during live incidents; always confirm the current position with the official body concerned before acting.
Is South East Water going bust?
The company says it has funds to July 2027 but needs new loan facilities shortly after to continue as a going concern. Lender talks are advanced but not legally committed. Supply continues as normal in the meantime.
What is the £30.5 million payment for?
It is a remediation package agreed with Ofwat on 14 July following investigations into repeated supply disruptions, poor customer service and a credit rating downgrade that breached the company's licence. It is funded by shareholders, not customer bills.
Would taps stop running if the company failed financially?
No. The water sector has a special administration regime designed to keep supplies running while a failed company is restructured or transferred, so customers would continue to receive water.
Are customers compensated for supply interruptions?
Yes. Guaranteed standards scheme payments apply for qualifying interruptions and are normally credited automatically. The December and January incidents generated £54.7 million of costs including customer compensation.
How many customers were affected by the winter incidents?
More than 77,000 customers experienced no water, low pressure or intermittent supply during the December 2025 and January 2026 incidents across Kent and Sussex.
