Business owners in Kent say they have faced a “nightmare” after recent water cuts have caused them to be out of pocket – with compensation not covering their losses.
Tens of thousands of people across Kent and the south east of England have lost their water supply in recent weeks – some for the second time in two months.
People in the area – which is served by South East Water (SEW) – are entitled to compensation, but businesses say the financial hit they have taken is far higher, with some losing £50,000.
Mike Martin, the MP for Tunbridge Wells, where thousands of homes have been affected, says the compensation being offered is “insulting” to his constituents and he will be arguing for SEW to pay more cash to those affected.
Business groups claim that companies across Kent have lost millions of pounds collectively as a result of the outages. Pub landlord Spencer Vincent, 44, had to close The Bull in Tunbridge Wells for 10 days in December during the first water shortages, followed by five days this month.
He had to cancel bookings and says he has lost out on about £2,000 per day in December and then £1,200 a day in January But so far he has only been offered £900 in compensation, for December, which he says “wouldn’t even cover the electric”.
Mr Vincent said it made him feel “physically sick” knowing his VAT bill was just around the corner, and that he also owed large energy bills and tax payments.
“Our rent has got to be paid every week; gas and electric bills are still coming. We’ve lost out on two or three weeks’ worth of takings that would have covered all these bills. Now we’re going to be playing catch up for quite a while,” he said.
He added that he had not heard anything from SEW wbout this month’s water cuts, and when he would receive compensation, and how much.
A spokesperson for SEW said it had applied compensation to all customers for the Tunbridge Wells outage in December, and was reviewing appeals from those who had not received compensation.
They added: “With regards to the most recent outages in Tunbridge Wells, this is being reviewed currently.”
Dan Archer, 32, had to send children home from one of his nurseries after having no water‘We’ve had to close – but we still have to pay staff’
Dan Archer, 32, from Yalding, owns three nurseries, two of which are in the Tunbridge Wells area. He said he had to send children home at one of his nurseries last week which had a financial impact.
He said: “Despite the closure, we still must pay staff. We still must ensure that everybody’s looked after. And in fact, it puts an extra stress on everybody to do extra to make sure that we’re inclusive and looking after these children as well.”
Mr Archer added that he had lost out on hundreds of pounds because of the shortages and faced other inconveniences that were hard to quantify financially: “It is the unseen costs as well. It’s the extra hours spent going to get the water, time away from the family.
“I missed bedtime five or six times for my two-year-old and my six-year-old because, I was having to queue up for water in a car park.”
He emailed SEW last week, asking what is going to happen to businesses like his in terms of receiving compensation, because although he is not the direct bill payer for the water, his business was still materially affected.
“We rent the space, so we pay the landlords per hour for our nurseries. What’s going to happen to us because we’re not the bill payers?” he asked.
‘Big gap in the law’
Water companies must provide a constant supply of water, and if they do not, customers are entitled to compensation.
If supply is interrupted by an emergency, the company must restore it within 12 hours of becoming aware of the problem, or 48 hours if it is in a strategic main pipe.
A customer is usually entitled to compensation of £20 for the first 24 hours, and £10 for each further 24-hour period that supply remains unrestored. There are exceptions if there have been exceptional weather conditions.
SEW is paying more than this in some circumstances, but local campaigners have questioned whether the compensation is fair.
Tudor Price, chief executive of Kent Invicta Chamber of Commerce, said the current statutory compensation scheme was “woefully inadequate” and failed to mitigate any of the actual losses experienced by business.
He added: “In the case of the Tunbridge Wells outage before Christmas, the typical restaurant would have lost between £900 and £1,100 per day. There are approximately 300 restaurants in the area, and they lost revenue over 12 days, so losses in the region of £3.6m.”
Tunbridge Wells MP Mike Martin said the compensation limits were designed for household customers rather than businesses. He added that there was a “huge gap” between what businesses received in compensation and how much money they actually lost out on.
“It’s not uncommon to hear businesses say they lost £50,000 [from the outages]. It’s become quite clear there is a bit of a gap in the law,” he said.
SEW boss David Hinton appeared in front of a parliamentary select committee earlier this month, where he said the company had allocated £600,000 “as an extra piece on top of the compensation”, which was £16.5m in total.
Martin said: “This extra £600,000 is kind of insulting, really, because it accepts the premise that businesses should be compensated above the statutory minimum, but then sets out a sum of money so small that by their own figures, it amounts to about £400 per business, which is in no way [in line] with the losses that some of them have incurred.”
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Martin said he would be taking forms filled in by businesses to SEW to argue that a much greater amount of money needs to be set aside for firms.
Price said he understood a potential compensation scheme for local businesses was being discussed with SEW but as yet, no details had been released.
Tanya Sephton, customer services director at South East Water, said: “We want to ensure that every single customer and business receives exactly what they are entitled to. Customers and businesses can view and download the up-to-date Guaranteed Standards of Service (GSS) guidance on our website.
“The provider added that now the incident was closed business customers would receive GSS payments through their water retailer.”
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