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Ban water company bosses ‘outrageous’ bonuses until they fix leaks, MPs say amid worsening drought

Water company executives paid themselves £27m in bonuses in two years, while 2.4bn litres of water leaks every day

Harry Cockburn
Environment Correspondent
Monday 08 August 2022 17:56 BST
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London Fire Brigade help ferry local residents along Hornsey Road in north London on 8 August, after a water main burst, causing flooding up to four feet deep
London Fire Brigade help ferry local residents along Hornsey Road in north London on 8 August, after a water main burst, causing flooding up to four feet deep (PA)

The government should ban new bonuses for water company executives until more leaks are fixed, opposition MPs have said as the UK faces another heatwave and worsening drought conditions.

Water company bosses, which preside over the firms largely responsible for deteriorating water quality in water courses and around coasts, awarded themselves almost £27m in bonuses over the past two years, despite failing to repair leaks allowing 2.4 billion litres of water to be wasted every day.

The Liberal Democrats are now calling on the government to step in to stop water company bosses taking bonuses until more leaks are repaired.

The party’s rural affairs spokesperson Tim Farron MP said: “It is outrageous that whilst millions of people suffer from hosepipe bans, water company execs reward themselves with these bonuses despite not even bothering to fix leaks. It begs the question, what on earth have they done to deserve these bonuses?

“These are the very same execs who let their companies pump raw sewage into our rivers."

He added: “Ministers are letting water firms get away with scandal after scandal and the public are sick of it. It is time someone stood up to these companies and demanded action. That should start with fixing these leaks, and then once and for all ending the sewage pumping into waterways”.

Analysis of company house records by the Lib Dems revealed that executives at England’s water and sewage companies were paid £48 million in 2020 and 2021, including £27.6 million in bonuses, benefits and incentives.

Meanwhile, the companies have only promised to halve leaks by 2050 despite predictions of a rise in summer droughts as record temperatures continue to be broken.

On Monday, a 36-inch water main burst in Holloway resulting in flooding up to 4-feet deep and causing anger as hose pipe bans come into force.

Thames Water, which is responsible for the flooding, is among those threatening to bring in a hosepipe ban, and the company has also been criticised in a row over its failure to run a £250m desalination plant, which was designed to deliver up to 100 million litres of water a day during times of drought. The company’s senior executives were paid around £5m despite the failure.

Southern Water, the first to implement a hose pipe ban, has paid their executives £3.4m in bonuses, "despite the companies pumping raw sewage into rivers and failing to fix leaking pipes", the Lib Dems said.

South East Water has brought in a hosepipe ban for some of their customers in Kent and Sussex and paid out almost £650,000 in bonuses and benefits over the last two years.

Labour MP Geraint Davies, who is on the Environment, Food and Rural Affairs Select Committee, told The Independent the scale of the water companies’ "dereliction of public duty" raised the question of nationalising water companies or whether they should be run as not-for-profit organisations.

He said: “The water companies have made billions in profit and pay just millions in fines for sewage leaks into our rivers and shoreline for which the Environment Agency rightly say they should pay higher fines with directors facing prison sentences. Meanwhile their gross dereliction of public duty includes failing to invest in minimising leaks to conserve water.

"The UK needs a national water strategy to safeguard our water supplies as climate change reduces supply alongside growing demand. The water companies have failed to act to prevent massive water leakage which puts our supplies at risk and the government should now enforce action paid from bumper profits whilst protecting consumers from price hikes amidst the cost of living crisis. Water is a natural monopoly and regulation is currently failing which begs the question whether water should be publicly owned or not for profit as in Wales.

"A national water strategy is inherently difficult between a disintegrated system of companies putting profit ahead of public or national interest. In any case investment in stemming avoidable leaks is an immediate priority.”

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