30 years ago we celebrated the national lottery launch. At the same time 35 years ago the newly privatised water companies were offered for sale. So what did they have in common?

A juggling bonus ball. Little did we know 35 years on that the bonus ball in the water industry would be far more controversial in the angry court of public opinion than the tie-breaker ball in the lottery. And here’s why. The CEO’s of the water companies collectively ‘trousered’ over £9 million in bonuses and a heck of a lot more in base salaries and other perks in 2023/24.

To earn that they worked tirelessly, digging trenches, repairing water mains, fitting meters, unblocking sewers; all very hard and labour-intensive work. Oh! so sorry, I got that round my neck. A water operative did that hard, manual work and earned 30 times less per year than the boardroom executives.

But, just a minute, to be fair, the local CEO of South West Water (SWW) decided not to take her bonus this year of £237,000, presumably because she did not believe it was either, not earned, or not appropriate.

Reasons?

Might it have been the £2.1 million fine in April 2023 for a series of sewage spills over a previous 4-year period ? The company pleaded guilty and was sentenced on 13 charges – six for illegal water discharge activities and seven offences of contravening environmental permit conditions.

An Environment Agency spokesperson said at the time;

“ failure to apply basic environment management principles has caused pollution incidents at some of the most scenic locations in Devon and Cornwall including bathing waters and designated Special Areas of Conservation. Having alarms to alert you that sewage is spilling is no good if no action is taken.”

OR

Might it have been the Exmouth beach pollution in the height of summer 2024?

OR

Might it have been the drinking water contamination and 8-week boil water notice in Brixham in 2024?

OR

Might it have been the Ofwat directive in October 2024 to return £17.4 million to customers as a result of “poor performance?”

So, under the circumstances, the forgoing of any bonus was a no brainer, but there was a mighty big consolation. She was awarded £298,000 in a long-term performance incentive bringing her total annual package to £860,000 pa.

Nothing more I can say other than the sharp end water operative looks excellent value for money at 30 times less annual earnings and given the harsher and often undesirable sharp end working conditions of water mains repairs and blocked sewers, compared to the creature comforts of the cosy boardroom.

Meanwhile far away in the square mile we have a relatively new Government talking of water industry change. A Water Bill going through the H of C bringing marginal changes and a national Water Commission set up to look, review and report on recommended changes by mid-year next year.

But here is the rub. For reasons beyond me they say they are not initially looking at replacing the broken water company model under which SWW operates and originally introduced by Margaret Thatcher in 1989.

A model which demands a first priority and focus on profit and shareholder rewards – with the consequence of squeezing operational costs and inevitable incidents as outlined above.

Make no mistake the issues lie in the boardroom – not with the fantastic and dedicated professional engineers, scientists, operators, customer services, and all who deliver the day-to-day service. More next week!