A review of the bonus rule for water bosses has begun, as the Environment Secretary says they must not be allowed to dodge it by disguising it as other forms of pay.
The government says the review will be wide-ranging as Dame Angela Eagle moves to close the “loopholes that reward failure”.
According to Labour, the ban has already stopped over £10 million going to water bosses since it was introduced. In the last financial year alone, nine companies have triggered the ban and more than £6.5 million of potential bonuses were blocked.
However, some executives have seen their total pay rise over 2025-2026 despite poor performance.
Water regulator Ofwat has warned that retention payments and large, unexplained increase in base pay risk undermining the spirit of the bonus ban and eroding “public trust”.
Dame Angela Eagle said: “People are sick of seeing water bosses profit while rivers are polluted and customers are repeatedly let down. A wide-ranging review launching today will ensure that failure doesn’t pay, whatever name the payment goes by. The bonus ban was the first step. Where there are loopholes, I want them closed.”
The public can have their say in the regulator’s four-week call for evidence, which closes on the 10th December. The findings aim to inform the government’s work to strengthen accountability in the sector, including through the Water Bill.
The action follows the first ever join report by Ofwat and other regulators, which shone a “harsh light” on underperforming companies.
Alongside this the Environment Secretary will set out improvement actions for each water company.
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