Numerous water companies including Thames Water, Severn Trent, Anglican, and Northumbrian Water have proposed that customers would have to face higher prices to improve infrastructure. But, the bonuses received by English and Welsh executives call into question the authority of water companies to raise prices for customers.
The House of Commons Library notes that ‘Water bills in all parts of the UK rose between 4.7% and 8.8% for the billing year 2024/25’. So, outrage over £9.1m bonuses to water company executives seems to be a justified reaction. The nature of these high bonuses highlights how out of touch water bosses have become with their audience, and highlights how water companies can justify paying executives more, whilst spending less on rectifying the failures of their systems.
The privatisation of the industry makes government regulation of executive bonuses and the consequences of environmental damage by firms harder to implement.
Ofwat is the regulatory authority which manages the water sector in the UK. In August 2024 they proposed a £168 million penalty to three major water companies - Thames Water, Yorkshire Water, and Northumbrian Water - over failures in management of sewage spills.
Whilst the media currently surges to comment on Labours first 100 days in office, we can certainly note the lack of action of the “special measures” to prevent illegal sewage dumping, as listed in the Labour manifesto. The privatisation of the industry makes government regulation of executive bonuses and the consequences of environmental damage by firms harder to implement. However, accountability and sustainability have to become a partnership of values that the Labour Party must heavily embrace in order to hold true to their promises of “change”.
The Water Bill, introduced to parliament on the 4th September, lays out greater power for regulators to withhold bonuses to executives that fail to address necessary change and continue to allow environmental damage. This being said, we have yet to see the effectiveness of this bill, and there is clearly more that needs to be done in order to stop the scandalous bonuses that water bosses receive and to make sure that they get their priorities in order.
