Thames Water faces penalty over ‘cover-up’ at water plant
Chief executive rewarded despite worries over leaks and closure of emergency desalination facility
THE Environment Agency (EA) last night accused Thames Water of hiding problems at its emergency back-up plant meant to protect thousands of households from drought.
Thames Water only informed the EA that its desalination facility in Beckton, east London, was not working on July 20, the day after temperatures in the UK hit a record 40C (104F), Whitehall sources told The Daily Telegraph.
The plant, which was built to provide drinking water for nearly one million people, was yesterday revealed to have been switched off despite a looming hosepipe ban across the capital.
Now officials are threatening regulatory action after the water company gave assurances that the plant was ready to operate in drought plans submitted to the EA earlier this year.
The first water restrictions will be introduced across Hampshire and the Isle of Wight today with households banned from using hosepipes, filling paddling pools or switching on water fountains and sprinklers. The Met Office yesterday said there was “very little meaningful rain” forecast for the driest parts of the country.
Police chiefs last night warned that encouraging neighbours to report on one another for breaching the hosepipe ban could lead to disorder that will create extra work for officers.
Questions over the drought policies of water companies has developed into a political row, with both Tory leadership candidates vowing to crack down on poor performance over leaks.
The Government is under pressure to get a grip on the looming drought crisis, which could mean millions of people living under water restrictions.
Labour last night accused the Government of failing to plan for an “entirely predictable” crisis. “In a country with plenty of rain outside of midsummer, we should not need to rely on hosepipe bans to get us through the dry months,” Jim Mcmahon, the shadow environment secretar, said.
The plant in Beckton was built in 2010 to provide drinking water for 900,000 Londoners in case of drought or water shortages. But it has never been run at full capacity and will be switched off until at least next year.
The EA has told Thames Water to come up with ways to cut more household demand for water and asked it to speed up maintenance work.
Government sources yesterday said it was “baffling” that Thames Water had failed to fix issues at the £250 million plant over the past decade.
Sadiq Khan, the London Mayor, yesterday held talks with Thames Water to put pressure on it to resolve the issues as soon as possible.
“Customers who have paid for this facility expect it to deliver what was promised,” said Karen Gibbs, of the Consumer Council for Water.
‘Thames Water customers who have paid for this facility expect it to deliver what was promised’
THE water boss in charge of a mothballed emergency plant was given a £500,000 bonus last year, annual accounts reveal, as the company faced questions over its drought readiness.
Sarah Bentley, the chief executive of Thames Water, received a £496,000 bonus, almost double her previous year’s performance-related payout.
On Wednesday, Thames Water faced questions from authorities and regulators after The Telegraph revealed that a £250million water plant built to protect nearly a million Londoners from drought was currently switched off.
The Environment Agency yesterday warned that a failure to maintain its emergency infrastructure could affect the water company’s environmental performance ratings. Thames Water is already rated just two stars out of four, amid concerns over its record on leaks and sewage pollution.
The water company has the worst record on leaks, at twice the national average, losing about 600 million litres every day.
Thames Water has warned that it may bring in hosepipe bans for its customers in the coming weeks, as it faces challenges during the dry weather.
Ofwat is understood to be monitoring the situation, but would not get involved before supplies run out.
The regulator has warned companies that any bonuses should be linked to performance amid a growing row over management of the country’s water resources.
Annual accounts show that Ms Bentley received a £496,000 bonus last year, almost double her previous year’s performancerelated payout. The bonus equates to about £1 for every 1,200 litres the company loses in leaks.
Ms Bentley’s salary also rose to £750,000 last year from £438,000 in her first year in the job in 2020-21, annual accounts show.
She also received a payment of £680,000 as part of a so-called golden hello for joining the company from Severn Trent and £90,000 in pension benefits, meaning she took home just over £2million in 2021/22.
In total, Ms Bentley has been promised a golden hello of almost £3.1million to compensate her for share options and other payments lost upon leaving her old job, which were due to be paid over the course of two years. Thames Water’s desalination plant in Beckton, east London, was built in 2010 to provide drinking water to 400,000 households in the case of drought or shortages. But it will be offline until at least next year as Thames Water races to fix issues before a poten- tial second year of drought.
Industry sources said the problems at the plant were most likely connected to its location on the Thames estuary, a decision made to cut costs by taking water that was less salty than if it were taken directly from the sea.
The company was forced to revise down the output of the plant by a third after regulators found it was unable to produce reliably clean drinking water as a result of its location.
But Thames Water yesterday faced questions over its failure to fix the problem in time for the driest July on record.
Sadiq Khan, the Mayor of London, is understood to have spoken with Thames Water and urged the company to fix the issue in time to help avoid shortages during the looming drought.
“Sadiq has already demanded Thames Water ‘up their game’ following a series of burst water mains that have seen millions of gallons of drinking water lost,” a spokesman said.
“He believes that imposing restrictions such as hosepipe bans should be a last resort – and that water companies should invest their huge profits in tackling leakage and preparing for the future.”
David Black, the chief executive of Ofwat, wrote to company bosses in February warning them that any bonuses should be linked to performance. He warned companies that their “performance in some areas, most notably on the environment, risks eroding trust and confidence in the sector”.
Mr Black, who was appointed interim chief executive in April 2021 and given the role permanently a year later, received a bonus of between £5,000 and £10,000 last year.
While the industry faced scandals involving pollution, leaks and potential droughts, Mr Black’s salary rose to £150-155,000, and alongside his bonus he received £59,000 in pension benefits, taking his total remuneration to £220,000-225,000.
An Ofwat spokesman said: “The water and wastewater sector provides an essential service, and regulating this multi-billion pound industry is a challenging and important job. All of Ofwat’s employees are paid in line with Civil Service guidelines.”
Sources stressed that his pay and benefits were lower than his predecessor, and he has taken a hard line on punishing wastewater companies, reducing leaks and finding ways to strengthen financial resilience.
Between them, 10 of Ofwat’s senior team shared bonuses of up to £80,000.