Water compensation rights: Government could double payouts for poor service

The Government claims households have been “let down by water companies time and time again”. Here’s what the proposed new plans could mean for you.

The Government is cracking down on failing water companies by aiming to double the amount of compensation due to customers for poor service provision.

The Government has announced plans to double the reimbursement for households in England and Wales when their basic water services are affected and is holding an eight-week consultation on the issue.

This year has seen numerous households around the country, including those in Cambridgeshire and Brixham, Bramley and Hastings, forced to boil water due to contamination issues. 

Yet the amount of money residents can claim in compensation is often dwarfed by the inconvenience and risk of illness.

Steve Reed, the Secretary of State for Environment, Food and Rural Affairs, said: “Our water industry is broken. 

“After years of failure, households and businesses have been let down by water companies time and time again. 

“The new Government will clean up the water industry and turn the tide on the destruction of our waterways ensuring water companies protect the interests of their customers and the environment.”

What can I currently claim?

Under the current rules, customers receive very little if their water is cut off or the water pressure is low. 

Indeed, under the current guidelines customers in Brixham and Bramley in Devon were not entitled to a pay-out, despite having to boil their water for two months due to concerns over parasites in the water.

At the moment, if your water gets cut off you would be due around £20, plus £10 for every additional 24 hours your household is left without water.

For low water pressure, households are entitled to just one payment of £25 a year, while if your home floods with sewage you would be due up to £1,000. 

Customers can receive £20 if a water company fails to show up for an appointment it has made, while if the firm is slow to deal with your complaint, you may receive £20.

How will this change?

Based on an average annual water and sewerage bill of £440, the Government says it will introduce a minimum payment of at least £40 under the new proposals – or 10% of the average annual customer bill, with several higher payments worth at least a quarter of it.

This means that problems such as low pressure could generate payments of up to £250, while households could be compensated by up to £2,000 for internal flooding from sewers.

Customers could claim a maximum of five payments of £50 per year for low water pressure, while if households have their water cut off, they would receive £50 and an additional £50 every 12 hours. 

Compensation for missed water company appointments and the poor handling of complaints would double to £40.

Meanwhile, the Government also plans to introduce automatic pay-outs of at least £50 for ‘boil notice’ issues, where homes are advised to boil water before using it.

When will the new regulations come in?

The proposals are currently out for an eight-week consultation and there is no set date for the new regulations to come in, but they are likely to be introduced unless there is strong opposition from water companies.