Consultation on updating the Guaranteed Standards Scheme (GSS)

The Water Supply and Sewerage Services (Customer Service Standards) Regulations 2008 are commonly referred to in the water and sewerage sector as the GSS.  

The GSS sets a baseline level of service below which companies must not fall by setting out certain standards and mandating payments to be made to affected customers for contravening these standards. Originally introduced in 1989, it was intended to provide protection for customers in the privatised water and sewerage market, and to mitigate the risk of natural monopoly service providers lacking incentives to prioritise customer service and experience.  

Several amendments since the original legislation was introduced have added additional standards, clarified existing standards, and uprated payment values. However, the values of payments have not been altered since 2000, and the standards included in the scheme have not been altered since 2008.  

The statutory standards set out in the legislation require payments for: 

• Failure to provide a notification of a planned appointment and a time window for the appointment (morning or afternoon, or a 2-hour window if requested)
• Failure to keep planned appointments, or cancelling an appointment with less than 24 hours' notice
• Failure to respond to written account queries about the correctness of bills within 10 days
• Failure to respond to written requests to change payment methods within 5 days
• Failure to respond to written complaints within 10 days
• Failure to provide 48 hours’ notice of planned supply interruption of more than 4 hours including notice of when supply will be restored
• Failure to restore supply by time stated in notice, or within an initial period of 12 or 48 hours (dependant on the nature of the supply interruption)
• Failure to restore supply for each further period of 24 hours
• Two incidents of low water pressure supply (below 0.7 bar) in a 28-day period
• Sewer flooding internally to a customer property from a sewerage company asset
• Sewer flooding externally to a customer property from a sewerage company asset

Summary of current statutory payment values and standards 

The GSS mandates payments for the circumstances above, differing between household and non-household (business) customers. These payments range from £10 to £50 for each standard breach and were last updated in 2000. A summary of the statutory payment values in the scheme is set out below in Table 1, including additional penalties where payments are not made within given time limits of 10 or 20 days. 

Table 1: Summary of current GSS payment values and standards 

Rationale for change 

Enhanced company schemes 

All water and sewerage companies offer tailored versions of the GSS, enhanced to varying degrees, including combinations of voluntarily uprated payment values, more stringent standard requirements, or additional non-statutory standards covering incidents such as boil notices. The statutory GSS standards are generally packaged into these voluntary customer offers, and so there can be significant variation in the customer protection measures between companies or regions. This lack of consistency, and regular need for companies to go beyond existing payment rates, demonstrates industry recognition the statutory GSS needs improvement. 

Recent service disruption incidents 

Recent incidents have also highlighted the need to update both payment values and the standards themselves. 

Hastings incident: May 2024 

From 2 to 8 May, over the bank holiday weekend, over 30,000 properties in the Hastings area experienced an interruption to their supply of water lasting several days, caused by a burst water main. This prompted Southern Water to provide a fund worth £1m targeting compensation for businesses, festivals and events, and community projects, providing for payments to businesses worth significantly more than the statutory amounts.  

However, payments were not made to households under the GSS, due to the nature of the burst to a strategic water main which only requires a restoration of supply within 48 hours, and the restorative action taken which Southern Water argued restored supply-in-kind within this limit. This incident highlighted the need for clarification of the statutory standards and uprating of the values of payments to provide the level of protection which customers expect. 

Brixham, Devon incident: May 2024 

In Brixham, South West Water issued a boil notice to customers on 15 May after the parasite cryptosporidium was discovered in the water supply system. Whilst the initial boil notice covering over 15,000 households was partially lifted within a week, for around 2,500 households the notice remained in place for around 8 weeks until the 8 July. The statutory GSS standards do not include incidents requiring the issuance of a boil notice. As such, while South West Water’s decision to significantly uprate their voluntary payments to customers by more than £100 was welcome, it did highlight a gap in the statutory scheme and show how the addition of standards to more effectively provide a guarantee of customer protection from such incidents would provide greater certainty to consumers.  

Voluntary implementation of Ofwat’s 2018 recommendations 

In response to a major freeze-thaw event caused by the ‘“Beast from the East’, which led to widescale supply interruptions and disruptions across much of England and Wales, Ofwat reviewed the GSS scheme. This included a consultation with industry stakeholders (ofwat.gov.uk) and further research into the wider "Beast from the East" disruptions (ofwat.gov.uk). In 2018, Ofwat subsequently published recommendations for changes to the GSS (ofwat.gov.uk) to better provide the level of protection which customers expect. 

In short, Ofwat recommended that the government amend the GSS regulations to: 

• Increase compensation payments for supply interruptions
• Reduce the time between additional compensation payments for longer supply interruptions from 24 to 12 hours
• Remove the provision that delays payments to customers if supply interruptions are caused by a burst or leak to a ‘strategic main’ (allowing 48 rather than 12 hours to restore supply), meaning all supply interruptions must be restored within 12 hours
• Make all GSS payments automatic
• Review GSS payment amounts when cumulative inflation exceeds 10%

Since these recommendations were made specifically in response to the freeze-thaw event in 2018, they only targeted the supply interruption standards. Defra and the Welsh Government accepted the recommendations but did not formally implement them, due to plans for a more comprehensive update to the GSS beyond supply interruptions which did not come to fruition.  

Most companies voluntarily implemented Ofwat’s recommendations following this review, and so they were widely adopted as industry best practice but without any amendment to the statutory requirements. This voluntary adoption of Ofwat’s recommended enhancements to the GSS is indicative of the level of agreement across industry stakeholders that updates to the GSS are overdue. Whilst further consideration is needed to clarify the details of any updates, widespread voluntary adoption indicates that Ofwat’s general approach and rationale for updating the GSS had support from industry stakeholders.