Water company bosses face ban on bonuses over illegal sewage spills

Water company bosses are facing a ban on bonuses over illegal sewage spills, ITV News West of England reporter Sangita Lal reports from Exmouth

Bosses of water companies which have illegally spilled sewage face a ban on their bonuses.

Environment Secretary Steve Barclay is set to block payouts to executives of firms which are polluting rivers, lakes and seas, starting with bonuses in the 2024-25 financial year from April.

Campaigners, Labour and the Liberal Democrats have been calling for the policy amid outrage at bosses pocketing more than £26 million in bonuses, benefits and incentives over the last four years.

Senior executives from five of the 11 water companies that deal with sewage took bonuses last year, while the other six said they declined after public anger.

Regulator Ofwat will consult on details of the proposed ban later this year.

Causing significant pollution at a bathing site or conservation area, or where a company has been found guilty of serious management failings, is likely to lead to a punishment, according to the Department for Environment, Food and Rural Affairs.

The development comes as water companies could be fined up to a 10% of their turnover for poor customer service, under new powers given to Ofwat.

Ofwat said there are too many instances where customers feel let down and their supplier does not have their best interests at heart, after a fall in satisfaction across most of the companies.

The regulator already has the power to block companies paying out money to shareholders if they fail to meet performance standards, and can impose fines.

A separate report by the Consumer Council for Water (CCW) in September found that Southern Water was the most complained-about company, with three times higher than average.

Complaints received by Southern Water were almost three times higher than the overall average for water and sewerage companies, while Thames Water’s were just over one-and-a-half times higher.

The crowd during a Save Windermere - stop the sewage campaign event in Bowness-on-Windermere, Cumbria. Credit: PA

More than 230,000 complaints were made to water companies in England and Wales by households in 2022 to 2023.

Environment Secretary Steve Barclay said: "We expect water companies to ensure customers are properly supported when services are disrupted.

"Enforcement action for poor customer service is an important and necessary step to restoring trust in the water sector and has been made possible thanks to government giving Ofwat increased powers to modify the licences of companies in England under the Environment Act.

"We are driving forward more investment, stronger regulation and tougher enforcement through the Plan for Water and will continue working closely with regulators to improve outcomes for both customers and the environment."

Previously, Ofwat announced the average water bill in England and Wales will rise by 6% to £473 a year from April 1.

Money raised from the hike will fund investment in infrastructure to reduce the amount of sewage being spilled in the country's rivers and seas.

A spokesperson for Dwr Cymru Welsh Water said: "Ofwat last year recognised the level of alignment of Welsh Water remuneration awards to delivery for customers and the environment and urged other companies to aspire to such levels.

"The executive directors also decided to forego their annual variable pay awards for the year. We will review Ofwat's consultation and respond in due course."

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