Northamptonshire's water supplier banned from giving bonuses to top bosses
Anglian Water is one of six firms who have been banned from handing out cash to senior staff this year.
Northamptonshire's water supplier is one of six water firms who have been banned from paying bonuses to senior bosses, under new rules that come into force today.
Thames Water, Yorkshire Water, Anglian Water, Wessex Water, United Utilities and Southern Water have been told that they cannot issue bonuses for the financial year 2024/25, which concluded in April.
They have all been banned under new rules which prevent bonuses from being paid if a water company does not meet environmental or consumer standards, does not meet financial resilience requirements, or is convicted of a criminal offence.
The six companies are not under an indefinite ban, and those firms may be able to offer rewards for the 2025/26 year, provided they stick within the Ofwat rules, under the Water (Special Measures) Act which comes into force on Friday.
If a company pays a bonus while it is under a ban, the water regulator Ofwat has the power to get the money back.
According to the Department for Environment, Food and Rural Affairs, more than £112 million in bonuses and incentives have been handed out by water firms in the last ten years.
Water companies set their own salary and reward packages, and it is understood that if firms that are banned from offering bonuses increase salaries to try to compensate, then officials may look into it.
Environment Secretary Steve Reed said: "Water company bosses, like anyone else, should only get bonuses if they've performed well, certainly not if they've failed to tackle water pollution.
"Undeserved bonuses will now be banned as part of the Government's plan to clean up our rivers, lakes and seas for good.
"Promise made, promise delivered."
Under the new rules, Yorkshire Water, United Utilities, Thames Water, and Southern Water will all be unable to pay bonuses to the chief executive or chief financial officer, for the 24/25 financial year.
Anglian Water will be banned from paying their chief executive a bonus, but their chief financial officer will not be banned.
Campaign group River Action have called the move a "welcome step" but said that increased salaries should be prevented.
Chief executive James Wallace said: "We won't end pollution for profit until water companies are refinanced and governed for public benefit.
"Any attempt to inflate base pay as a workaround must be stamped out.
"The era of rewarding criminal leadership must end. No more cream for the fat cats."
An Anglian Water spokesperson said:
“At Anglian Water, we have a brand new CEO and CFO, and for this year (2024/25) while serious pollutions performance improved (by 36%), Anglian Water Services will not pay a bonus to either of its retiring Executive Directors, or our new CEO Mark Thurston.
“We fully support financial reward being tightly linked to company performance and have significantly reduced all senior management and Director bonuses in numerous consecutive years as a result.
“This is a vital sector, pivotal to the nation’s growth and prosperity, and we know we need to work hard as a sector to regain trust of customers and stakeholders. We are ready to play our part, but we also need – as Sir Jon Cunliffe has identified – a reformed regulatory framework that supports this journey and new chapter of improvement and growth.
“The UK water sector needs to attract tens of thousands of new recruits over the coming years – to overcome the challenges and build the new infrastructure that future generations will rely on. It is essential we remain able to retain and attract the best talent at all levels. Our independent Remuneration Committee is concerned that the unintended consequences of blanket prohibitions risk hampering this trajectory of improvement that will support growth.”