Water bosses’ bonuses under review as the government hunts for workarounds

On 12 November 2026 the government opened a review of the ban on bonuses for water company bosses. The reason is a suspicion that bonuses have simply been renamed as other kinds of pay.

What the ban has done so far

Since it was introduced, the ban has stopped over £10 million going to water bosses.

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In the last financial year alone nine water companies triggered the ban, and more than £6.5 million of potential bonuses was blocked.

What is suspected

Even so, some executives have seen their total pay rise over 2025-26, despite continued poor performance by their companies.

Ofwat has warned that retention payments and large, unexplained increases in base pay risk undermining the spirit of the bonus ban and eroding public trust. Put plainly: call a bonus a pay rise and the ban is formally intact but substantively sidestepped.

Environment Secretary Dame Angela Eagle said the review must be wide-ranging, and framed the task as ensuring that failure does not pay, whatever name the payment goes by. She called the bonus ban the first step and said that where there are loopholes, she wants them closed.

Whose bonuses are blocked automatically

Published alongside it is the Environment Agency's Environmental Performance Assessment Report. The picture: pollution incidents remain far too high, and only one company achieved the top four-star rating.

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A one-star rating automatically blocks bonuses for executives. That catches Southern Water, Thames Water, South West Water and Yorkshire Water. The same applies to any company with a Category 1 pollution incident — one with a major, serious, persistent or extensive impact on the environment, people or property.

This is also the first ever joint report from the regulators. Previously a company could point to a good score from one regulator while falling short with another. By pooling their data, the regulators have closed that gap.

What happens next

The Environment Secretary will set out clear improvement actions for each water company: tackling leakage, delivering sustained reductions in pollution incidents and improving customer satisfaction.

The structure of oversight is changing too. Eight new regional water councils are to give local people a say, and a strengthened Water Bill is to give the public greater control and hold companies to account.

The government has already set expectations for the next Price Review, warning companies they must deliver better value for money for struggling households.

How to have your say — the deadline is 10 December

Ofwat has opened a four-week call for evidence which closes on 10 December. Anyone can respond, and the findings will inform the government's work on accountability in the water sector, including through the strengthened Water Bill.

For an ordinary bill payer this is a rare chance to influence the rules directly and for nothing: the subject is what the people who send you your water bill are paid for.