Anglian Water bosses warned bonuses may be blocked

Ofwat said water companies, such as Anglian Water, need to rebuild public trust

Bosses at a water company have been warned by the water services regulator they could be banned from receiving bonus payments if the firm's performance does not improve.

Ofwat said following serious pollution incidents, any performance related payments for senior Anglian Water staff may not be justified.

Anglian Water has been prosecuted five times since 2022.

A spokesperson for the water company said it supported financial reward being linked to company performance. They added: “Especially when it comes to protecting the environment and supporting customers."

Anglian Water was told to refund customers £38.1m by the water regulator in October.

It was the second highest refund ordered of UK water companies by Ofwat.

In a largely critical report, the regulator highlighted a criminal conviction against Anglian Water by the Environment Agency, a low environmental performance assessment rating and that it was "in the lagging category" in Ofwat's latest water company performance report.

In 2023 the company was fined £2.65m after millions of litres of untreated sewage overflowed into the North Sea at Jaywick, Essex.

It was also fined £1.2m after admitting causing pollution in Cambridgeshire, Buckinghamshire and Northamptonshire in 2019.

Earlier this year the company's chief executive told the board he would not accept any bonus payments if they were awarded due to "the number of serious pollution incidents," the report noted.

The company’s chief financial officer did receive an additional performance related payment of £95,000.

While Ofwat said the bonus payment for the company’s finance chief was difficult to justify, the regulator was unable to use recovery mechanisms to block the bonus as customer money was not directly used to fund it.

In the same report, three other water firms were blocked from using customer money to pay bonuses collectively worth £1.6m.

Ofwat said: "It is not enough for companies to just acknowledge events which clearly indicate poor performance, they need to be clear how any payment at all is justified in the light of these events."

The regulator said it expects companies to consider this in future for bonus payments and ensure it can be justified.

In a statement Anglian Water said its decisions on pay and bonuses were linked to performance across the business and they were overseen by an independent remuneration committee.

"If we do not meet our targets, it is reflected in potential financial reward across all Anglian Water employees," it added.

Pippa Heylings⁩, the Liberal Democrat MP for South Cambridgeshire, has called for a new independent water authority.

She claimed Ofwat had "not been effective in cracking down on these polluting firms" and said bill players needed a regulator "that has teeth".

She said the £95,000 payment to Anglian Water's chief financial officer was "scandalous".

David Black, the chief executive of Ofwat, said water companies need to do more to "rebuild public trust".