How South East Water and its boss have form for failure

When South East Water (SEW) is in the news, the headlines do not generally make for comfortable reading.

While the water and sewerage industry and its regulators have little to cheer about, this water-only supplier is now facing calls to be nationalised - such is the strength of feeling over performance as it grapples with supply chaos. It comes as 23,000 properties had been affected by supply issues across Kent and Sussex, and a major incident was declared in the two counties.

People entered a fifth day without water as Storm Goretti caused power cuts and burst pipes on Friday and Saturday last week. It followed a "water quality issue" in December, which meant 24,000 people suffered days without water in Tunbridge Wells.

A SEW statement on Wednesday said, "We are very sorry to all our customers who have been affected. "We know and understand how difficult going without water for such a long period of time is and how difficult it makes everyday life." Here, Sky News will examine what's gone wrong at the Kent and Sussex water supplier over many years and why its leadership team is facing such stringent criticism amid accusations of continued rewards for failure.

Who owns South East Water? The company, which is responsible for supplies to 2.3 million homes, has been owned by a consortium of mainly foreign investment and pension funds known as HDF Holdings for nearly 20 years. It has long faced criticism over the payments of dividends to shareholders while grappling with high debts, culminating in a fresh £200m cash injection a year ago to keep SEW afloat pending inflation-busting bill hikes agreed by water regulator Ofwat.

The 20% increase in the 2025-30 settlement (which is still subject to appeal by the company) was to allow for greater investment in neglected supply infrastructure. The pension fund of lender NatWest also owns a 25% stake in SEW.

When approached by Sky News, the NatWest Group pension fund said: "We are extremely concerned by the impact these incidents are having on the households, businesses and other users who rely on SEW for water services. "NatWest group pension fund will use its influence as a minority shareholder to direct SEW's board to ensure these issues are fully resolved." Why is SEW not working? A water industry source told Sky News that SEW was not fit for purpose, describing it as "an enormous failure".

"The company is not as resilient as it needs to be.