Water company executive bonuses have increased despite that sewage spills into British seas and waterways hit record levels last year, an analysis has found.
Bonuses paid to executives of water companies across England and Wales increased to £9.1m in 2023/24, rising by over £120,000 from 2022/23, even though sewage was dumped into waterways for a staggering 3.6m hours last year, research by the Liberal Democrats has revealed.
Thames Water executive bonuses nearly doubled, rising from £746,000 in 2022/2023 to £1.3m in 2023/2024, despite its chief executive quitting half way through the year as the company teetered on the edge of bankruptcy.
Severn Trent bosses received the biggest payout, with three executives earning an eye-watering £3.3m in bonuses.
This was followed by three executives at United Utilities, which were paid nearly £2.5m in bonuses, and four executives at Yorkshire Water, which received almost £1.1m.
“It is a national scandal that these bonuses are being paid out by firms who disgustingly pollute rivers, lakes and beaches,” said Tim Farron, the Liberal Democrat’s environment spokesperson.
“These executives are pocketing more every year whilst sewage levels rise. Frankly, the whole thing stinks.
“The last Conservative government shamefully let these disgraced firms get away with it, and now the new government has to step up.
“These bonuses are an insult to the British public and must be banned straight away. The Liberal Democrats will push for a vote in Parliament to ban these bonuses whilst sewage continues to flow.”
A spokesperson for the industry representative Water UK told i: “Almost all of these bonuses were paid by shareholders, not customers, but all companies recognise the need to do more to deliver on their plans to support economic growth, build more homes, secure our water supplies and end sewage entering our rivers.
“We now need the regulator Ofwat to fully approve water companies’ investment plans so that we can get on with it.”
Water company executives’ pension contributions also rose to a new high of nearly £1.7m in 2023/24, marking an increase of more than 8 per cent over the previous year.
Thames Water alone paid its executives £754,000 in pension contributions in 2023/24, despite that the firm was placed under “special measures” by Ofwat as it struggled to address its £15.2bn debt burden, raising concerns that it will collapse into a publicly funded administration.
Base pay for water company executives also remained at more than £9m in 2023/24, with one executive at Northumbrian Water paying themselves an astonishing £421,000.
“How do any of them have the gall to accept a bonus in any shape or form with what is going on?” said Jo Bateman, a sea swimmer from Exmouth, Devon.
Ms Bateman, 62, is taking South West Water to court over sewage spills in her local bathing spot and will be starring in a documentary about Britain’s sewage crisis, Jo In The Water.
She told i: “A bonus is a performance-related payment and the water companies are getting worse, year on year.
“Even if they weren’t getting worse, they should not be polluting our rivers and seas. As long as they continue to do that, I do not know how they could argue that they deserve performance-related bonuses.
“Whether they are legal or not, their behaviour is atrocious. It’s diabolical across the board.
“From a completely apolitical viewpoint, I think bonuses should be banned.”
An Ofwat spokesperson told i that it lacks the powers to fully ban bonuses for water company executives under current legislation.
“However, our powers do allow us to intervene to block customers from paying for these bonuses if we determine that they are not aligned to overall company performance for the benefit of customers and the environment,” the spokesperson added.
“We will soon be making an assessment of all companies’ decisions, and we will publish our findings in due course. This will be the first year that these rules have come into force.”
Water companies are allowed to discharge sewage during periods of exceptional rainfall to prevent their systems from being overwhelmed, but concerns have been raised over how often this has been happening.
Caz Dennett, 53, of Weymouth, Dorset, has boycotted her bill payments to Wessex Water since April 2023 in protest of the firm’s poor wastewater services.
Commenting on the bonus increases, she said: “It’s shocking that they are on the increase when they should be zero.
“It’s clearly outrageous and it would be good to know what is the basis for those benefits.
“I fail to understand how they are justified. What it will do is just further enrage the public who are already massively fed up, angry and sickened by the level of sewage being discharged.
“It’s in every brook, stream, river and lake across our country and this is just going to enrage people even more.”
Paul de Zylva, sustainability analyst at Friends of the Earth, said: “Water bosses are cashing in ahead of the government’s promised crack down on executive pay. There are too many loopholes in how bonuses are currently set.
“It seems the more they pollute, the more bosses are rewarded for failure. Now, as water companies push the regulator to allow them to charge consumers even more from 2025 onwards, this bonus bonanza looks set to flow on.”
A Defra spokesperson said: “For too long, water companies have pumped record levels of sewage into our rivers, lakes and seas.
“That’s why we are placing water companies under special measures through the Water Bill, which will strengthen regulation including new powers to ban the payment of bonuses for polluting water bosses and bring criminal charges against persistent law breakers.
“We are also carrying out a full review of the water sector to shape further legislation that will transform how our water system works and clean up rivers, lakes and seas for good.”
Ahead of the general election, i called on all the major parties to sign up to its five-point manifesto to tackle sewage pollution and save Britain’s rivers, seas and waterways.
Some of the measures laid out in the manifesto will be introduced in the new Water Bill, such as tougher powers for the regulator Ofwat and increased prosecutions against water companies.
But i is urging the Government to go further by raising EA funding in the Budget later this month as well as offer farmers grants to reduce agricultural pollution.
The Liberal Democrats and the Green Party have signed up to the manifesto, but Labour and the Conservatives are yet to back it in full.
Sir Keir Starmer praised the i manifesto, but stopped short of fully committing to its five pledges.
