Announcing a 4 per cent rise in interim profits to pounds 122m, an 8 per cent dividend increase and a pledge not to cut the payout in future years, Kelda denied, however, that it was forcing employees rather than shareholders to pay for the cut in water bills by Ian Byatt of Ofwat.
Kevin Bond, chief executive of Kelda, said it was already planning 240 job cuts before the Ofwat announcement. The additional 260 redundancies are to meet efficiency targets set by the regulator.
The latest job losses will reduce Yorkshire Water's workforce to 2,200 compared with 3,500 three years ago and will cost pounds 25m but yield savings of pounds 5m-pounds 7m. They come on top of 1,100 job losses last week at Severn Trent. Further redundancies are due to be announced in the next three days by Anglian, Welsh Water, South West Water and North West Water.
The industry body, Water UK, has claimed that 9,000 jobs are at risk but at the present rate of cutbacks, the figure looks more likely to be around 7,000 jobs.
Mr Bond said the next logical step in its drive to improve efficiency was to be allowed to merge with other UK water companies. Mr Bond added that Kelda was looking for "bolt-on" acquisitions in the US following its $600m takeover of the Connecticut-based Aquarion water earlier this year.