Ofwat’s Out in the Cold report which followed the supply interruptions of last winter found that the current compensation scheme isn’t fair, fast or free from hassle, so the regulator put out a call for evidence to figure out how to improve it. The most important changes they are recommending happen right now are:
The amounts customers are compensated when they lose water should go up. For example, Ofwat are recommending a customer who doesn’t have water for two days should receive £120, rather than the current £30.
Customers should receive compensation at more regular intervals when they’re left without water – every 12 hours, rather than 24.
All compensation payments should be sent out automatically, meaning customers no longer have to submit claims.
Remove the provision that delays payments to customers if supply interruptions are caused by a burst or leak to a “strategic main”
Guaranteed Service Scheme payments have not changed since 2001 so have therefore diminished in real terms. To avoid a repeat of this, Ofwat also propose to review the scheme when the cumulative effect of inflation reaches 10%.
While the proposed changes are being considered by both Governments, Ofwat expect all companies and retailers to reflect on their recommendations when setting their own compensation schemes. Ofwat also think there’s potential to review the compensation rules more comprehensively in the future.