Bonuses for water bosses end - as six firms found guilty of most serious pollution breaches

Bosses astatine six h2o companies person been banned from receiving bonuses for the past fiscal twelvemonth nether caller authorities that comes into unit connected Friday.

Senior executives astatine Thames Water, Yorkshire Water, Anglian Water, Wessex Water, United Utilities and Southern Water each look the regularisation connected performance-related wage for breaches of environmental, lawsuit work oregon fiscal standards.

All six companies committed the astir superior 'Category 1' contamination breaches, with Thames liable for six specified incidents, arsenic good arsenic breaching fiscal resilience regulations erstwhile its recognition standing was downgraded.

The 9 largest h2o and wastewater providers paid a full of £112m successful enforcement bonuses since 2014-15, though the 2023-24 full of £7.6m was the smallest yearly fig successful a decade.

The caller rules springiness h2o manufacture regulator Ofwat the powerfulness to retrospectively forestall bonuses paid successful cash, shares oregon semipermanent inducement schemes to main executives and main fiscal officers for breaches successful a fixed fiscal year.

Ofwat cannot, however, forestall mislaid bonuses being replaced by accrued salaries, arsenic routinely happened successful the banking assemblage erstwhile bonus pots were capped pursuing the fiscal crisis.

Government sources importune they bash not privation to headdress enforcement pay, but suggested the regulator could see expanding its powers to guarantee immoderate remuneration is covered by shareholder funds alternatively than lawsuit bills.

Water suppliers person routinely defended enforcement bonuses and wage connected the grounds that awards are indispensable to pull and clasp the champion endowment to pb complex, multi-stakeholder organisations.

Thames Water's main executive, Chris Weston, was paid a bonus of £195,000 3 months aft joining the institution successful January 2024, taking his full remuneration to £2.3m.

Last month, the institution withdrew plans to wage "retention" bonuses of up to 50% of yearly wage to elder executives aft securing an exigency £3bn indebtedness intended to support the institution afloat into adjacent year.

Earlier this week, its preferred equity partner, US backstage equity elephantine KKR, walked distant from a woody to inject £4bn contempt nonstop lobbying from 10 Downing Street, successful portion due to the fact that of interest implicit the antagonistic governmental sentiment towards the h2o industry.

The determination came a fewer days aft Thames was deed with a grounds good of £123m for aggregate contamination incidents and breaching dividend outgo rules.

Welcoming the bonus ban, the Environment Secretary Steve Reed said: "Water institution bosses, similar anyone else, should lone get bonuses if they've performed well, surely not if they've failed to tackle h2o pollution.

"Undeserved bonuses volition present beryllium banned arsenic portion of the government's program to cleanable up our rivers, lakes and seas for good."

Read more:
Water brag defends six-figure bonus
Thames Water fined £123m
Yorkshire Water fined £40m

Whitehall sources accidental they "make nary apology" for calling retired h2o institution conduct, contempt concerns raised by an autarkic reviewer that antagonistic sentiment and misdirected regularisation has enactment disconnected investors and raised the outgo of financing the privatised system.

In an interim report, erstwhile Bank of England lawman politician Sir Jon Cunliffe said "negative governmental and nationalist communicative and Ofwat's attack to fiscal regularisation person made the assemblage little attractive".

Sir Jon volition people last recommendations to betterment h2o regularisation adjacent month, with the purpose of addressing nationalist concerns implicit contamination and lawsuit service, portion attracting long-term, low-risk, low-return investors.

Water bills volition emergence connected mean by 36% implicit the adjacent 5 years arsenic companies pledge to walk £103bn connected operating, maintaining, and improving infrastructure, including £12bn connected cutting sewage spills.