UK reviews water company bonus ban after £6.5m blocked

The government has launched a review of water company bonus rules after Ofwat said nine firms in England and Wales triggered the ban in 2025-26, blocking more than £6.5 million in potential executive bonuses. The review is intended to address other forms of pay that could undermine the restriction, including retention payments and unexplained increases in basic salaries.

The nine companies are Anglian Water, Dŵr Cymru, Northumbrian Water, Severn Trent Water, Southern Water, South West Water, Thames Water, Wessex Water and Yorkshire Water. Ofwat said failures involving pollution, consumer duties, enforcement and other performance standards led to the bans. Seven were related to environmental pollution, according to the regulator.

The government said the review would examine how to prevent companies from avoiding the effect of the rule through other payment arrangements. Ofwat has warned that fixed retention payments and substantial increases in base pay without adequate explanation risk creating a perception that companies are circumventing the ban and damaging public trust. That is a warning about the appearance and potential effect of those practices, not a finding that every...