Water bosses urged to cut own bonuses before sewage leak curbs

WATER bosses have been urged to voluntarily cut their own bonuses this year if their companies have been responsible for illegal pollution, before a proposed law change by the Government.

Ministers are to bring in rules that would ban bonuses for water company bosses and executive board members at companies that have been successfully prosecuted for serious pollution incidents. The rules would not come into force until the financial year 2024-25, but the Government has said companies should apply the rules on a voluntary basis for this year’s bonuses.

The full criteria for the bonus ban will be decided in a consultation by the regulator Ofwat, which is responsible for remuneration.

The Government has suggested that it could include successful prosecution for a Category 1 or 2 pollution incident, including causing significant pollution at a bathing site or conservation area.

It could also be applied where a company has been found guilty of serious management failings. Last year the Environment Agency concluded four prosecutions for pollution incidents.

Anglian Water was prosecuted for a category 1 incident in January, and a category 2 incident in April. It was fined £2.65million for allowing untreated sewage to overflow into the North Sea in 2018, although the fine was reduced to £300,000 last week by a judge.

South West Water and Thames were also both prosecuted for category 1 incidents, in April and July respectively.

It is unclear over what retrospective period the bonus criteria would cover, and prosecutions can take years from the date of the incident. Several water company bosses last year declined to receive their bonuses, after apologising for the extent of sewage amid a public outcry. Bosses have received £26 million in bonuses since 2019.

The Government has been under pressure to do more to stop water companies from spilling sewage into rivers and seas. “In cases where companies have committed criminal breaches there is no justification whatsoever for paying out bonuses. It needs to stop now,” Steve Barclay, the Environment Secretary said. Campaigners said the ban on bonuses was welcome, but did not go far enough to tackle the regular release of sewage by water companies.

An Anglian Water spokesman said: “We support financial reward being tightly linked to company performance, especially when it comes to protecting the environment.” Thames Water declined to comment. A Water UK spokesmaon said: “Financial reward should be tightly linked to performance, including protecting the environment.”