Government will block rewards after company bosses have received £26 million in bonuses since 2019 despite sewage spills
The bosses of water companies guilty of illegal pollution of rivers and seas with sewage will be banned from receiving bonuses by the Government.
Stephen Barclay, the Environment Secretary, will block the bosses’ bonuses if their companies regularly breach laws protecting rivers and seas, starting in the upcoming financial year 2024/25.
Environmental campaigners have called for the measure since it emerged that water company bosses have received £26 million in bonuses since 2019 despite the damage to rivers and beaches.
Mr Barclay said: “No one should profit from illegal behaviour and it’s time that water company bosses took responsibility for that.”
The ban would cover chief executives and all executive board members.
Some water bosses including the heads of Southern Water and Thames Water voluntarily waived their bonuses last year amid anger over sewage spills,
However, five bosses did take their bonuses. They included Anglian Water’s Peter Simpson, who received a £302,033 bonus in 2022-23 even though his company’s environmental performance was rated two stars out of four.
In July 2021, Southern Water was fined £90 million after being prosecuted for deliberately pumping raw sewage into the sea. Its chief executive, Ian McAulay, still took a bonus of more than £500,000.
Water pollution ‘unacceptably high’
Ofwat, the industry regulator, will consult on the criteria for blocking the bonuses which could include prosecutions for the two most serious categories of pollution, such as serious contamination of a bathing site.
The Environment Agency reported last summer that Britain had fewer serious water pollution incidents in 2022 than in the previous year but it said the number remained “unacceptably high”.
Serious pollution incidents fell from 62 in 2021 to 44 last year, with more than half coming from the assets of Thames Water and Anglian Water, both of which have faced fines from the agency, the report said.
The ban on bonuses comes as, from Monday the water companies will face fines of up to 10 per cent of their turnover for poor customer service.
Ofwat has rewritten the water companies’ licences so that they will be liable for fines if they fail their customers with persistent disruptions to their water supplies, foul smells or sewage leaks in homes or streets.
David Black, chief executive of the watchdog, said: “From Monday we are putting water companies on notice to improve customer service and where we see failure, Ofwat can and will take action which could result in significant fines.”
Fines focused on major water cut-offs
The fines will be focused on major incidents such as the persistent water supply cut-offs that afflicted the 4,000 residents of Wadhurst in East Sussex. Last June they were left without running water for the third time in a year.
The watchdog’s latest performance report showed there has been a fall in customer satisfaction across most of the companies it regulates.
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