Bosses’ bonuses banned at six water firms | EUROtoday

Quite a few water firms have been banned from paying “unfair” bonuses to senior executives beneath new guidelines, the federal government has introduced.

The measures apply to water firms that don’t meet environmental and client requirements, should not financially resilient or have been convicted of a prison offence.

There has been rising public concern about sewage spills and rising payments for years whereas water firms have paid out £112m in rewards to executives over the previous decade.

Under the beefed-up Water Act, six corporations are banned from paying bonuses this 12 months together with Anglian Water, Southern Water, Thames Water, United Utilities, Wessex Water and Yorkshire Water.

The ban, which is backdated to April 2024, means regulator Ofwat can power corporations to claw again bonuses which have been paid or face enforcement motion. It applies to share awards in addition to money.

It is a part of new measures within the Water Act which comes into power on Friday.

Environment Secretary Steve Reed mentioned that water firm bosses “should only get bonuses if they’ve performed well, certainly not if they’ve failed to tackle water pollution”.

Officials mentioned the federal government would look into firms making an attempt to get across the ban by elevating executives’ base salaries.

But Liberal Democrat Environment spokesperson Tim Farron known as the federal government’s announcement “half-baked”.

He added that it “doesn’t touch the sides in enacting fundamental reform – especially if water companies can still workaround bonuses and wriggle off the hook”.

In the final 12 months alone, £7.6m in bonuses had been paid to water bosses in England the federal government mentioned.

Water UK, which represents firms within the trade, mentioned that corporations’ impartial committees, which resolve on performance-related pay, will abide by the legal guidelines set by authorities.

It added: “Water companies are focused on investing a record £104bn over the next five years to secure our water supplies, end sewage entering our rivers and seas and support economic growth.”

This week, a overview discovered that the water trade in England and Wales is failing.

The impartial Water Commission, led by former Bank of England deputy governor Sir Jon Cunliffe, mentioned in its interim findings that public belief had been shaken by “pollution, financial difficulties, mismanagement [and] infrastructure failures”.

Customers have seen payments rocket as water corporations attempt to elevate funds to put money into crumbling infrastructure.

The fee mentioned that the UK’s water system has suffered “deep-rooted, systemic and interlocking failures over the years”.

This included a “failure in government’s strategy and planning for the future”.

Last month, Thames Water was fined £122.7m for breaching guidelines over sewage spills and shareholder payouts, the most important ever wonderful issued by Ofwat.

The highly-indebted firm serves a few quarter of the UK’s inhabitants, largely throughout London and elements of southern England, and employs 8,000 individuals.

Earlier this week, Thames suffered a significant blow in an try to safe its future after US non-public fairness large KKR pulled out of a £4bn rescue deal for the corporate.

In April, campaigners discovered that the quantity air pollution incidents in England was at a 10-year excessive.