On 12 February, the Government responded to media coverage about water bosses being banned from receiving bonuses if the company they head up has committed serious criminal breaches.

At present, this is still a proposal, as an Ofwat consultation will take place in the near future.

Criteria for bans could include successful prosecutions for a Category 1 or 2 pollution incident or where serious management has been proven. This is yet to be decided if a plan goes ahead.

Categories 1 and 2 include the most serious pollution incidents, such as at a bathing water site or conservation area.

Environment Secretary Steve Barclay said:

“No-one should profit from illegal behaviour and it’s time that water company bosses took responsibility for that.

“Tougher action is needed to address poor performance by water companies, which is why I am pleased Ofwat is going further today on bonus payments.

“In cases where companies have committed criminal breaches there is no justification whatsoever for paying out bonuses. It needs to stop now.

Mr Barclay added that he aims to see the reliance on water company self-monitoring reduced.

CEO comment

For many, this proposal does not come quick enough, with Mark Lloyd, head of the Rivers Trust, saying that although the proposal may “grab some headlines in the run up to an election, they will not address the more fundamental structural issues in the water sector”.

In addition to a long-term lack of investment into infrastructure, pressure also comes from challenges such as a growing population and climate change.

Dr Laurence Couldrick, CEO at Westcountry Rivers Trust supported Mark Lloyd’s comments, adding: “There are many obstacles to address in relation to our water sector and bonuses are just one manifestation of the issue of incentivising without clear linkage to negative actions.”

Ofwat first announced bonus bans as a potential deterrent in March 2023.

If it does become a reality, it would apply to water companies in England and Wales from the next financial year, starting in April 2024.

Read more on this from Defra at deframedia.blog.gov.uk