Chair of South East Water resigns as MPs warn ‘no confidence’ in leadership
The chair of South East Water has resigned after a report by MPs said they have “no confidence” in company’s leadership following major supply outages in Kent and Sussex.
Independent non-executive chair Chris Train stepped down from the board, effective immediately, and is replaced by interim chair Lisa Clement. It comes as the parliamentary Environment, Food and Rural Affairs (Efra) Committee said the leadership’s incompetence and lack of accountability have driven its poor performance, while its inadequate governance framework has failed to hold senior employees responsible. Bosses were grilled twice by the MPs over their response to multiple supply interruptions across Kent and Sussex. Thousands of customers were left unable to access tap water, shower or flush their toilets during the outages between November and January. Tunbridge Wells community group Dry Wells Action is calling for chief executive David Hinton to quit, and for the company to appoint consumers to its board as non-executive directors to ensure their voice is “no longer overlooked”. Of Mr Train’s decision, the group said: “Resignation is the correct decision. The real question is how Hinton thinks he cannot follow suit.” In a statement from South East Water announcing Mr Train’s resignation on Thursday, it said it was “mutually agreed that new independent Board leadership is now required to oversee a critical period of positive, transformative change for the company, its customers and local communities”. It further apologised to customers hit by “operational failures”, resulting in a loss of public trust, and added that it “notes” the report by the Efra committee. It said the company plans to double investment into its water supply network over the next five years. In a report, published on Friday, the Efra committee said the company was “devoid of proper leadership” and “riddled with cultural problems”. “Leadership teams play a major role in how company culture develops; culture change at this scale requires South East Water’s leadership to change,” it said. Responding to Mr Train’s resignation, committee chair Alistair Carmichael welcomed the decision, but reiterated calls for the chief executive to go as well. “(M)any of the problems identified in our report fall firmly into the areas of responsibility of the chief executive, David Hinton,” he said. “The board wasn’t doing its job in holding the chief exec to account. So we have thrown down the gauntlet to the only entities who can change SEW for the better – its investors.” The group of MPs said SEW’s shareholders – Utilities Trust of Australia, NatWest Group Pension Fund, and Desjardins Group and associated holding companies – must now hold the company to account. The firm was fiercely criticised over multiple failings that led to the outages, as well as its response during the crisis. These included poor maintenance of infrastructure, failing to monitor critical risks, failing to invest or build resilience and blaming external factors such as climate change and increased demand. The company was also accused of a disorganised and slow response to restore supply, a lack of communication with customers and insufficient emergency supply through water tankers and bottled water, which left some vulnerable residents without. Mr Hinton was grilled by the Efra committee in January, but MPs said they had concerns about the accuracy of his evidence and his lack of accountability. They then recalled the chief executive alongside Mr Train to answer further questions at a hearing earlier this month. In a contrite appearance, Mr Hinton admitted he “got it wrong” in his handling of the outages, and acknowledged some of the team’s failings. But in its report, the committee said the leadership demonstrated a clear pattern of obfuscating responsibility and “groupthink”, arguing that this is preventing their ability to analyse problems and learn lessons. Dry Wells Action has called on the Government to act, including to order regulators to join the board during a probationary period while it is assessed on whether it should retain its licence. Its chairman Jonathan Hawker said: “We are grateful to the select committee for its diligence. “But we now need actions, not just words. “This community urgently needs infrastructure investment and modernisation, better communications and leadership from all parties in this sorry saga of failure. “Until there is action, this town will not be able to put away its emergency water bottles.” A statement from South East Water’s interim independent non-executive chair, Ms Clement, said: “The board thanks Chris for his service to South East Water. “The Company’s focus remains on delivering engineering and operational changes that will strengthen the resilience of South East Water’s network and transform the Company for the benefit of customers and local communities.
Published: by Radio NewsHub