DWR CYMRU Welsh Water is among three firms reprimanded by the regulator Ofwat for attempting to use customer funds to pay executive bonuses. Collectively worth £1.6m, these bonuses have been blocked, with Ofwat insisting they be funded by company owners or shareholders instead.
The other firms implicated are Thames Water and Yorkshire Water. Ofwat’s chief executive, David Black, emphasised the importance of rebuilding public trust, stating:
“Water firms need to sharpen executive mindsets and improve their performance and accountability. Stopping customers from paying for undeserved bonuses is part of that process.”
PUBLIC OUTCRY AND INDUSTRY CRITICISM
The sector has faced intense scrutiny over governance and environmental failures. In response, the government has launched an Independent Water Commission, chaired by Sir Jon Cunliffe, to address the issues. Its findings are due in June 2025, with potential reforms including replacing Ofwat entirely.
Environment Secretary Steve Reed criticised the industry’s handling of bonuses, calling it “disgraceful” that half of UK water companies awarded what he described as “unjustifiable and unmerited” payouts. Reed announced plans for urgent legislation to ban such bonuses for polluting water companies.
IMPACT ON WELSH WATER
Dwr Cymru Welsh Water admitted that its performance was “not as good as expected” but defended the bonuses, citing “strong customer service and financial performance.” The firm pledged to comply with Ofwat’s directives.
The Herald understands that Ofwat’s new rules mean any bonuses paid from customer funds will be deducted from future bills. Welsh Water customers could see adjustments if the company fails to align with these expectations.
A TROUBLED SECTOR
Thames Water, drowning in debt and without traditional shareholders, has faced significant challenges. Its chief executive, Chris Weston, received a £195,000 bonus for his first three months, bringing his total pay for that period to £437,000. Ofwat has now mandated that such bonuses cannot be funded by the operating company, leaving its lenders to shoulder the cost.
Yorkshire Water, meanwhile, reduced bonuses for its executives following a review of its environmental performance but acknowledged that public concern over executive pay remains high.
David Chadwick, Welsh Liberal Democrat MP for Brecon, Radnor and Cwm Tawe is calling on the Government to urgently enshrine an outright ban on bonuses for water company bosses in law.
David Chadwick Welsh Liberal Democrat MP for Brecon, Radnor and Cwm Tawe said: “Our beautiful rivers and coastlines in Wales have been pumped full of raw sewage by water firms putting profit before people for far too long.
“The previous Conservative Government gave water companies a free pass to dump filth into our precious waterways while taking home eyewatering bonuses on top of already inflated salaries.
“The Labour Government now needs to listen to the Liberal Democrats and finally put a stop to it, by prioritising the Water Bill in parliament and enshrining a ban on bonuses as quickly as possible.
“Those who actively wreck local environments across Wales should not be rewarded for doing so. Enough is enough.”
The Herald will continue to monitor developments affecting Welsh Water and its customers.
