Southern Water chief executive Lawrence Gosden offers apology and compensation for outage in New Forest, Southampton and Eastleigh

The boss of a water firm whose supply dried up for 58,000 customers this week has offered an apology, promised to learn from the incident and set aside compensation of £9.7 million.

Southern Water has come in for stark criticism for the way it handled a serious three-day outage hitting businesses and homes in the New Forest, Southampton and Eastleigh.

As reported in the A&T, county council leader Nick Adams-King blasted the firm for its “woeful, chaotic and un-coordinated” efforts after a technical fault at its Testwood site in Totton caused chaos for customers.

This evening (Friday), Southern Water chief executive Lawrence Gosden – who reportedly was handed a £764,000 pay package earlier this year – said he was “very sorry” for the incident, which he described as “the single biggest water supply incident in our company’s history”.

He said the firm “failed” and let customers down, adding that he wanted to acknowledge what the company got wrong and “what we’ll do about it”.

He admitted opening “just one” bottled water station on the first day was “far from adequate” and that Southern Water “failed to obtain sufficient quantities of bottled water”.

Mr Gosden said homes and businesses affected would be offered compensation and would hear from the company in writing over the next three weeks.

The statement in full:

I want to offer the community affected by this incident some assurances. Firstly, we will be offering our customers – homes and businesses – compensation for the loss of supply they had to put up with. All customers will hear from us in writing in the next three weeks what compensation they will receive. We will apply compensation at the new rates proposed by the Government and being brought before Parliament in the New Year. Even though these may not come into force in law until April, we will use them as the standard. The approximate cost to Southern Water of paying this compensation will be £9.7 million.

I want to apologise personally to the community in Hampshire following the water supply interruption this week, for the huge disruption and inconvenience it caused so many people so close to Christmas. In this note I also set out a commitment to compensate customers, costing £9.7 million, and I promise to review this incident thoroughly and learn the lessons.

The community served by the Testwood water works has suffered similar interruptions before, and so what happened this week is a repeat for many who live in the area. I understand how disruptive and infuriating this was for all those affected, and I’m very sorry. It was the single biggest water supply incident in our company’s history.

Testwood serves just over 70,000 homes and businesses, and the consequences of its shutdown over a technical fault were widespread and extremely rapid. Hundreds of Southern Water employees staff responded quickly, mobilising to fix the fault, volunteering to staff bottled water stations, and working round the clock to keep the community informed. Many of them live in the local community or nearby in Hampshire. It was a huge effort.

But we failed, and we let our customers down. I want to acknowledge specifically what we got wrong and what we’ll do about it.

With 58,000 properties left without water, opening just one bottled water station on the first day was far from adequate. We had a lot of willing employees ready to staff more stations, but we and our partners failed to obtain sufficient quantities of bottled water. This left people queuing for hours, in cars or on foot. This fell far short of what the community needed.

In addition, our more vulnerable customers – those on the Priority Services Register – were poorly served, having to wait too long for deliveries to arrive, and in some cases not receiving a delivery at all. There’s always a degree of confusion over the PSR during an incident, as we merge our lists with those of councils and the NHS, and people phone in to let us know that they or a relative are vulnerable. The list more than tripled inside a day to 20,000 households. However that’s no excuse.

I want to offer the community affected by this incident some assurances. Firstly, we will be offering our customers – homes and businesses – compensation for the loss of supply they had to put up with. All customers will hear from us in writing in the next three weeks what compensation they will receive. We will apply compensation at the new rates proposed by the Government and being brought before Parliament in the New Year. Even though these may not come into force in law until April, we will use them as the standard. The approximate cost to Southern Water of paying this compensation will be £9.7 million.

Secondly, I promise that we are going to review very thoroughly what went wrong in the Testwood incident, and learn the lessons. This includes taking whatever steps are needed to ensure that we are better prepared for such incidents in future. We’ll be held to account by your MPs and elected councillors over the measures we take.

Unfortunately, similar incidents cannot be ruled out across the region in future. The new management team at Southern Water is determined to deliver improvements, and a turnaround for the company. But we have a lot of ageing infrastructure, like Testwood water works, which needs to be modernised or replaced. It should have been done a long time ago, but investment was squeezed as customer bills remained static for more than a decade. This badly needed investment is now coming, and is the main reason customer bills are going to rise significantly over the next 5 years.

At Testwood itself over the next 7 years, we’re going to invest a quarter of a billion pounds on improving the site for our customers. The money will be spent on modern equipment, making Testwood efficient and resilient - far less prone to failure.

I would end by repeating once more my sincere apology to everyone for the inconvenience and disruption caused by this incident.