20,000 homes could avoid water bill hike if sewage row bosses gave up their £1.6m bonuses
MORE than 20,000 customers could be spared a water bill increase if bosses of three firms at the centre of the sewage dumping scandal gave back their bonuses.
Thames Water, Yorkshire Water and Northumbrian Water chiefs got a combined £1.69MILLION windfall to boost their salary, despite a probe by watchdogs into waste spills.
The regulator, Ofwat, has declared the firms were flouting licence rules by routinely discharging into rivers and seas.
They were fined a record £168million between them for the breach this week.
But we can reveal that if the companies stopped doling out extra money to execs amid the “catalogue of failure”, some 20,373 customers would not need to pay more to plug any financial shortfall.
Campaigners have branded water companies “brazen” for paying bonuses while hiking bills.
Charles Watson, chairman of River Action, said: “These water companies have been systematically breaking the law over many years through repeated illegal sewage discharges.
“It beggars belief that a business that is being subject to these huge fines for such illegal activity could even think it reasonable to reward their CEOs with massive bonuses.
“Any business leader with a conscience would forgo their bonus under these circumstances.
“But, sadly, we have come to expect this kind of brazen behaviour from the water industry — where putting profit before the environment, whatever the cost, is now the name of the game.”
Heidi Mottram, boss of Northumbrian Water, was awarded a £315,000 bonus, which took her total pay packet, including pension and other perks, to £812,000.
Meanwhile, customers of the firm are being charged an additional £45.
But if Ms Mottram gave up that extra money, 7,000 households could be spared any rise in water costs.
At Yorkshire Water, where £107 is being added to bills, chief executive Nicola Shaw had a £371,000 bonus included in her £1.03million total income.
And finance chief Paul Inman received an extra £245,000, taking his pay packet to £681,000.
If they handed back their bonuses, 5,757 of their customers would not face an extra squeeze.
Meanwhile, at cash-strapped Thames Water, new boss Chris Weston got a £195,000 bonus, pushing his total pay to £437,000 for the three months to the end of March.
Finance chief Alastair Cochran, who acted as co-chief executive for part of last year, was given a £446,000 top-up, making his pay £1.3million.
His former co-chief exec, Cathryn Ross, pocketed a £113,000 bonus, earning a total of £418,000.
But if they gave their bonuses back, as households brace themselves for an additional £99 on their bills, it would cushion 7,616 customers from an increase.
‘Brazen behaviour’
The firms face massive fines for releasing sewage into rivers and seas when the weather was not bad.
The regulator only allows water companies to use storm overflows to discharge diluted sewage in exceptional circumstances, such as heavy rainfall, to avoid it coming into people’s homes and bursting pipes.
Singer turned clean water campaigner Feargal Sharkey has called for a public inquiry into the water industry.
Last month, he said: “We have ended up with every river in England being polluted, while £72billion of your money has been stripped out.”
Thames Water could have to pay a £104million penalty for its actions, it is a planned £47million for Yorkshire Water, and Northumbrian Water’s levy is set to be £17million.
Ofwat chief David Black said its investigation showed “excessive spills from storm overflows”.
The water companies want you and me to pick up the tab for their failure to invest. As they do so, their execs take home massive bonuses
He added: “The level of penalties . . . signals the severity of their failings.”
Thames Water, which had suffered underinvestment, and Yorkshire Water have both defended their bonuses and said some cash was discounted from what bosses could have pocketed.
Yorkshire revealed it was “to take into account the company’s environmental performance not being where we want it to be”.
The planned bill hikes by Thames, Yorkshire and Northumbrian are part of a bid to fix their leaky pipes and reduce sewage spills from storm overflows.
It comes after previous owners prioritised dividends over much-needed investment.
Ofwat has already reduced the amount that water firms can increase bills.
‘Real health risk’
The regulator’s investigation found all three water companies were regularly discharging sewage. Its probe highlighted a strong link with the state of disrepair at treatment sites.
The release of waste damages the surrounding environment and poses a real health risk for those swimming in the water.
The Environment Agency found that the number of spills at Northumbrian Water rocketed last year, from 29,697 to 46,492, with more than 280,029 hours of sewage being discharged.
Yorkshire Water had 69,455 spills in 2023, a 46 per cent increase from 47,435. And Thames’s sewage spills also doubled from some 8,014 to 16,990 last year.
Thames Water has already been put in special measures by Ofwat.
GET RID OF PAY PERKS
LIBERAL Democrat environment spokesman Tim Farron says: Make no mistake, this is a scandal – our stunning rivers, seas and lakes pumped full of raw sewage.
It is environment vandalism on a daily basis.
And the real stinker, Brits have to pay for the clean-up through bill hikes.
But it is not just the environment suffering at the hands of these greedy firms. It is bill payers, too.
The water companies want you and me to pick up the tab for their failure to invest.
As they do so, execs are taking home massive bonuses, which could have spared thousands of customers from having to pay for their failings.
The Government should ban these bonuses until this sewage scandal has ended.
We need to reform the industry from top to bottom, and that starts with abolishing Ofwat and replacing it with a new regulator – a Clean Water Authority with real powers to clamp down on these polluting firms.
The regulator has, for the first time, appointed an independent monitor to track the firm’s performance.
Thames has already warned it has only 11 months of cash left. And the planned £104million fine will weaken its finances further.
The company said its board had “reduced the bonus payable for 2023-24”.
It added: “In making this decision, the committee gave particular consideration to the fact that, while the environmental measures in the bonus scorecard were all at or above target, this did not translate through to outcomes, specifically the increased number of pollution events recorded.”
A Yorkshire Water spokesman said that its bosses had still been awarded 61 per cent of the maximum allowance. But he revealed that the bonus had been reduced by “around a third to take into account the company’s environmental performance not being where we want it to be”.
The water company said that it was contesting Ofwat’s penalty.
Northumbrian Water did not respond to a request for comment.
Thames Water
Boss: Chris Weston Salary: £197k Bonus: £195k
WHAT OFWAT REPORT SAID: Thames Water failed to meet its duties and obligations.
More than two thirds, 67 per cent, of wastewater treatments had capacity and operational issues; 16 per cent of its storm overflows were found to be in breach.
Last year 40 per cent of its sewage spills were due to operational and maintenance issues.
Even more striking was the increase in the duration of spills from these sites, with spills recorded to have lasted for a total of 141,738 hours in 2023.
This was significantly higher that the duration of spills recorded in 2022 (considered a drier than average year), but was also 64 per cent higher than the duration of spills from Thames Water’s high spilling in 2021.
Yorkshire Water
Boss: Nicola Shaw Salary: £585k Bonus: £371k
WHAT OFWAT REPORT SAID: Failings relate to the management, operation and maintenance of its wastewater treatment works and collecting systems.
These are vital assets used to clean and treat sewage which have a direct impact on the environment.
Over 80 per cent of storm overflows have spilled on 20 or more occasions in at least one of the last four years, and over 50 per cent on more than 60 occasions.
Yorkshire Water has failed to demonstrate that these spills resulted from exceptional circumstances.
Yorkshire did not have appropriate processes and controls.
It took too long to investigate and address potential issues that it did identify.
Senior management and board had inadequate oversight.
Northumbrian Water
Boss: Heidi Mottram Salary: £483k Bonus: £315k
WHAT OFWAT REPORT SAID: Northumbrian Water has lacked adequate and routine processes to enable it to properly monitor and assess compliance with the full range of its environmental obligations.
For example, 47 per cent of its storm overflows spilled more than 60 times in 2021, 61 per cent spilled more than 40 times and 75 per cent spilled 20 or more times in that year.
There is a strong correlation between high spills and operational issues, which points to Northumbrian Water not having properly operated and maintained a significant proportion of its waste water treatment works.
We also identified high spill frequencies from storm overflows on the rest of Northumbrian Water’s wastewater network.