Southern Water is one of six water companies which are being banned from paying bonuses to senior executives with immediate effect.
Yesterday (June 6) new measures in the Water (Special Measures) Act came into force meaning companies are not permitted to pay bonuses to water bosses that oversee poor environmental and customer outcomes.
The rules have been backdated to apply to any bonuses relating to the financial year from April last year.
The six companies now banned from paying bonuses are Thames Water, Yorkshire Water, Anglian Water, Wessex Water, United Utilities, and Southern Water.
Water companies have awarded over £112 million in bonuses and incentives over the last decade. Last year alone, £7.6 million in bonuses were paid to water bosses in England.
Tables from the Department for Environment, Food and Rural Affairs show a total of £5,41 million paid to Southern Water bosses between 2014 and 2024.
East Thanet MP Polly Billington MP has welcomed the new measures saying she has been campaigning on the issue since before the general election, adding: “For too long Southern Water bosses had been “failing upwards” despite the ongoing sewage scandal, rocketing customer bills, and poor management.”
She said the behaviour of water companies is something that constituents raise with her regularly on the doorstep and in her inbox, and that she shares their fury over the issue.
In 2024 water companies released sewage into England’s rivers and seas for 3.61 million hours – a grim new record.
In 2021, Southern Water received a record £90 million fine after pleading guilty to thousands of illegal sewage discharges which polluted rivers and the sea in Kent, Hampshire, and Sussex. The offences were found to be caused by deliberate failings, causing major harm to protected areas, conservation sites, and oyster beds.
During the trial, the court were told Southern Water deliberately presented a misleading picture of compliance to the Environment Agency, with the judge saying that Southern Water had shown “a shocking and wholesale disregard for the environment, for the precious and delicate ecosystems along the North Kent and Solent coastlines, for human health, and for the fisheries and other legitimate businesses that depend on the vitality of the coastal waters.”
Despite the record fine, that year the company’s CEO received a bonus of £183,600, as part of a total pay package of £764,000, up from £428,000 the previous year.
At that time the CEO was Ian McAulay who had been in post since 2017. Lawrence Gosden took over as CEO in July 2022.
This year Southern Water pleaded guilty to charges of unpermitted discharges from Thanet wastewater sites in Margate, Broadstairs and Weatherlees Hill between 2019 and 2021, in breach of Environmental regulations.
The water firm made the plea to 13 charges at a hearing at Medway Magistrates’ Court on Tuesday 22 April, following an Environment Agency investigation into the pollution incidents.
The case was adjourned for sentencing at a later date.
A release of wastewater from the emergency outfall at Foreness Point in June 2021 affected 11 isle beaches. Southern Water said the release was due to a lightning strike at the wastewater pumping station.
A failure at the Broadstairs pumping station in October 2021 resulting in advice against bathing or entering the area below the high water mark at 14 of Thanet’s beaches following an unscreened wastewater release.
The releases provoked a number of public protests across the isle.
Southern Water raised customer bills by an average of 47% on 1 April 2025, prompting Polly Billington MP to call for CEO Lawrence Gosden to donate last year’s bonus to an ocean protection charity.
The MP said:“I’ve been campaigning for months for strong action to curtail these outrageous payouts for failure at Southern Water. It’s a disgrace that executives have been paid hundreds of thousands of pounds in bonuses in recent years despite soaring customer bills, a failure to invest in vital infrastructure, and huge fines for illegal sewage dumping.
“(Now), this shocking gravy train comes to end, with the welcome news that until such time as Southern Water can demonstrate it is delivering for customers and the environment, its bosses will not be receiving a penny in bonuses.
“While the last government sat on its hands, this Labour government is standing up for billpayers and finally holding failing water companies like Southern Water to account.”
A Southern Water spokesperson said: “We note the government’s announcement, and await full details of how this will impact our existing approach to performance-related reward – this is already closely tied to the delivery of improvements in customer satisfaction and environmental performance.
“Any bonuses are paid by shareholders, not customers, and are overseen by an independent committee.”
Under the new measures, any company failing to meet key standards will automatically lose the right to award bonuses. If a company pays a bonus while banned, Ofwat has the powers under the Water (Special Measures) Act to direct the company to claw back the money. Any company that does not comply with Ofwat’s directions will face enforcement action.
Southern Water says bill increases are needed to fund improvements.
The company says it plans a £10 billion investment across the region over the next five years – including £38m on sewer upgrade work at Broadstairs and £15m in Margate, Westbrook, Cliftonville and Birchington. A £24m upgrade has already been carried out in Ramsgate.
Work in Thanet includes £8m for improved resilience at Margate and Broadstairs pumping stations and £2m to replace mains in Margate.
Some £1.5m is planned for storm overflow reduction work with much of this taking place in Broadstairs.
At a roadshow in Broadstairs last year John Penicud, managing director of wastewater sites and operations, acknowledged that investing in an upgraded system would mean a rise in customers’ bills.
He said, in real terms bills have been cut by 40% with the average cost in 2014 being £420pa and in 2024 £421pa.
He said Southern Water owners Macquarie have invested £1.6 billion since 2021 and added that shareholders have not received a dividend since 2017.
I do hate photos with lop-sided horizons.
Eter – And lop-sided politicians!
Tilt your head?
About time, now start jailing them as well.
There are three lop-siders here!
I think the jails are full enough,so let’s be original for a change and get them to do community work,such as emptying out the sludge tanks at their nearest sewage works.
Its a good start.
Who foots the bill for the fines? We do.
Renationalise!