Water Company Bosses Banked Bonuses Despite High Levels Of Sewage Dumping
Seven of the UK’s nine water companies gave bonuses to their executives linked to environmental targets last year, despite significant amounts of sewage being dumped into UK waterways.
An analysis of water companies’ accounts by PoliticsHome found that overall bonuses were worth a total of over £1.35m shared between 15 different executives across the sector in 2021-2022, even as untreated sewage was released into UK rivers for more than 2.7m hours that year.
While there was a rise in serious individual sewage spills that year, for which several companies received fines, there is no suggestion that the nationwide scale of sewage releases that year were illegal in itself. A government plan launched last year has targeted water companies with drastically reducing sewage overflows.
A recent investigation by The House reported allegations the Environment Agency was failing to pursue the prosecutions of many polluters due lack of funding and staffing to engage in lengthy court battles. One staffer suggested the cuts had left polluters marking their own homework.
The companies with the worst record on sewage dumping in the period, according to annual data released by the Environment Agency, were also among those receiving the highest bonuses for hitting targets that included protecting the environment.
Annual reports show that bonuses for executives at major companies are reliant on them hitting a broad range of internal targets, from shareholder returns and profits to environmental protections.
In some instances firms were able to meet environmental targets by packaging concerns around sewage dumping and water quality with other environmental metrics such as hitting net zero targets or improving customer relations, meaning the targets could be hit and bonuses paid out despite significant sewage dumping rates.
United Utilities awards its executives a total of £372,892 in annual bonuses for effectively “maintaining and enhancing services for customers” – a metric that included environmental concerns.
The company that dumped the most sewage into UK waterways in 2021 (the most recent data available) United Utilities spilled sewage into English rivers 81,558 times that year, almost 11,000 occasions more than the second highest company.
Severn Trent, South West and Wessex Water also awarded executives with bonuses for hitting targets that related to environmental aims.
Wessex Water specifically awarded its four leaders a total of £218,796 in bonuses for specifically “protecting and enhancing the environment”, despite spilling sewage into UK waterways 23,532 times in 2021 – the sixth highest of any water company.
Severn Trent executives received a total of £335,657, while South West water executives were paid a total of £297,000. Severn Trent dumped sewage 59,684 times in 2021, the third highest amount, and South West 42,484 times, the fourth highest amount that year.
A spokesperson for South West stressed that neither executive received a bonus specifically related to the company’s pollution performance or the Environmental Performance Assessment conducted by the EA.
Yorkshire Water, Northumbrian Water and Southern Water awarded executives less than £100,000 in environment bonuses. They dumped sewage 70,062, 36,483 and 19,077 times respectively. This does not mean the leaders of those firms took home less money than their counterparts, just that they didn’t package their environmental aims with other targets, for which they could have received additional bonuses.
A spokesperson for Southern Water said “directors had to deliver performance against plan” and that “every detail” of their bonus regime “is transparently disclosed” in its annual report.
Thames Water, which recorded the second lowest number of sewage dumps in 2021 at 14,713, awarded its CEO and CFO a total of £794,000 in annual bonuses last year, but none of its short term targets specifically related to the environment.
“Bonuses are tied to a range of stretching performance targets, and if we do not hit our targets, bonuses do not get paid,” a Thames Water spokesperson said. “We have a long way to go – and we certainly can’t do it on our own – but the ambition is clear.”
The only company that chose not to award a bonus related to environmental targets was Anglian Water, which recorded 21,351 raw sewage dumps in 2021. In January of this year the company was fined £560,170, after raw sewage discharge killed 5,000 fish in a Northamptonshire river.
A spokesperson for Anglian Water said: “As an organisation with social and environmental purpose at its core, the remuneration of our senior managers is directly linked to company performance.
“Although we surpassed our regulatory and our own stretch targets in a number of critical areas, such as reducing leakage, our overall performance last year did not meet the levels we aspire to, so, as our customers would expect, all senior management and Director bonuses were significantly reduced, including that of our Chief Executive.”
None of the remaining five companies responded to a request for comment on the findings at the time of publication.
The new findings come as the government and regulators appear to be backing away from previous proposals to increase the maximum fines for sewage spills from £250,000 to £250 million.
Labour’s Shadow Environment Secretary Jim McMahon, backed by pop star-turned river campaigner Feargal Sharkey has recently announced proposals to automate fines for water companies using the monitors that water companies are obliged to fit to their treatment works.
McMahon also suggested current regulators weren’t fit for purpose and hinted at plans to create a new super regulator to crack down on sewage pollution.
“Not only have the Tories given the green light for our country to be treated as an open sewer, they’re also allowing polluters to be rewarded for dumping filthy raw sewage into communities where people live, work and holiday,” McMahon told PoliticsHome.
“The next Labour Government will end the Tory sewage scandal, delivering mandatory monitoring on all sewage outlets, introducing automatic fines for discharges, setting ambitious targets for stopping systematic sewage dumping and ensuring that water bosses are held to account for negligence.”
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