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Ofwat, the UK’s water regulator, has announced bonuses for water bosses in England could be banned this year for companies that spill sewage, break the law or mismanage their finances. New powers under the Water (Special Measures) Act mean the regulator can ban bonuses of water company executives under criteria of Ofwat’s choosing, subject to consultation.

The regulator has launched a consultation into draft criteria under which it would ban bonuses being paid to chief executives. The Guardian reported that Ofwat sources are near-certain to ban some water CEO bonuses this year. This has sparked reports that Yorkshire Water CEO’s £371K bonus would likely be blocked by future Ofwat ban amid £40m enforcement action.

However, many campaigners are dissatisfied with the proposed measures. Ofwat said bonuses will be banned if water companies are given a one-star rating by the Environment Agency, however under this criteria no bonuses would have been blocked in the 2023-24 financial year as every water company achieved a more than one star rating. Campaigners also argue that the EA’s rankings scheme is not functioning properly, as it potentially awards companies who illegally dump sewage full marks.

Commenting on Ofwat’s decision to consult on bonuses for executives, Tim Farron MP, Liberal Democrat Environment Spokesperson, commented it is an “absolute scandal” that Ofwat has taken years to open bonus consultation. The Guardian reports bonuses for water company bosses in England and Wales rose to £9.1m last year. More than a third of that total was at Severn Trent, which was fined £2m the same year for “reckless” pollution but lifted its bonuses to £3.36m.