Water firm pay outs: Who is eligible and how much compensation will be paid?

Words by Georgia Ziebart, ITV News Producer

Households across the UK are expected to benefit from significantly higher pay outs to compensate for water company failures.

The government announced the changes, which will see new and increased compensation become compulsory for customers, following a public consultation.

But who will be eligible for the payments, and how much will the compensation be?

ITV News explains what you need to know.

Why are the changes being made?

The government say the reforms underscore their commitments to hold water companies to account for poor performance, and to support consumers who receive compromised water services.

Currently, some water companies voluntarily offer compensation to customers who experience interruptions to their supply or other problems, but there is no statutory requirement to do so and rates can vary significantly among firms and location.

Payment rates for when water service standards are not met have remained unchanged since 2000, meaning reform is long overdue.

Who is eligible for compensation?

The new rules will affect all water companies in the UK, with compensation being compulsory for failures including water supply outages, sewer flooding, and low water pressure.

Customers who have problems like low water pressure could receive payments of up to £250, compared to the £25 currently available.

Meanwhile households affected by flooding inside their homes from sewers could receive £2,000 or more, compared to £1,000 under current rules.

The changes will also see the list of reasons for compensation expanded, to include when boil notices are issued - for example, when drinking water quality standards drop or when firms fail to conduct meter readings or installations as promised.

How much could I receive?

The changes follow a public consultation which found an average of 84% of water customers and 70% of businesses agreed with the proposals, the Department for Environment, Food and Rural Affairs (Defra) said.

A series of failures and outages in recent years means the public deserves better compensation and the sector needs reform, according to Steve Reed, Secretary of State for Environment, Food, and Rural Affairs.

"Customers have too often been let down by water companies, with supply cut off, low water pressure and in some cases even contaminated tap water," he said.

In May, a 'Do Not Drink' notice was given to 600 properties in Bramley, Sussex, after a fuel leak. At the time, Thames Water offered a voluntary £30 payment. Under new rules, a compulsory payment of £220 would have been given to households, and £440 to businesses.

No compensation was given to residents in South Staffordshire last month whose water supply was disrupted due to a burst water main. Under new rules, households could have received a £150 payment, and businesses could have been paid £300.

Similarly, there was no entitlement for compensation for the tens of thousands of people caught up in the cryptosporidium outbreak in Brixham, Devon, earlier this year. Those customers could now receive at least £10 per 24 hours, potentially amounting to more than £500 for incidents over eight weeks.

How do I apply for compensation, and when will the changes come into force?

The changes are expected to come into force next year.

All compensation payments will be automatic where water companies are able to identify that a customer is eligible, Defra said.

Customers will be able to apply for compensation by contacting their company if they feel they are eligible and have not received a payment. Claims should be made within three months of the incident.

The changes form part of an overhaul by the government of how water companies are regulated and meet consumer demand.

Water firms have asked Ofwat to grant steep hikes in customer bills for the five years to 2030 despite performance issues.

Ofwat is expected to confirm on Thursday how much it will allow them to increase their bills by over the period.

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