Water bill rises will begin from April (Image: Getty)
The boss of Southern Water has defended his £180,000 bonus despite plans to hike customers’ bills by 85%.
Southern Water, which serves Hampshire, the Isle of Wight, Kent, and East and West Sussex, plans to increase bills by more than any other UK water company over the next five years.
It comes after recent anger over a major water outage for customers just before Christmas, a record £90million fine in 2021 for dumping raw sewage into the sea, and a £183,600 bonus for chief executive Laurence Gosden.
The embattled CEO told Tuesday’s Environment, Food and Rural Affairs Select Committee that the bill increase “relates simply to geography” because the South-east of England is water-stressed.
And he argued that the £183,000 bonus he received in July was deserved because water quality – previously the worst in the country – had improved.
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Mr Gosden said: “In relation to bonuses, I’ve been chief executive for two full years and I’m part way through my third.
“For my first year I declined a bonus, because it was complete, it was just not right that I took a bonus in a year when the water network was coming under such scrutiny and public concern and anger was at such a high level.
“In my second year the majority of the bonus was disallowed. And you are right, I did take a bonus related to water quality improvements and safety improvements only.
“That was because our bonus scheme is directly related to the performance improvement of the turnaround plan.
“We did move from bottom of the industry for water quality through to just outside the upper quartile of the industry in one year. So it was related to that.”
It comes amid public outrage over sewage spills into the nation’s waterways and massive dividends taken by shareholders.
Water companies paid £2.5billion in dividends and added £8.2billion to their net debt between 2021 and 2023.
Mr Gosden also claimed utilities had suffered from 10 to 15 years of “flat bills”.
He added: “That means that we have very large forward investment plans for water resources.
“There’s a very large water resources [requirement] to safeguard this part of the country from climate change and that is on top of a very significant environmental improvement and investment programme to redesign sewer systems.
“Effectively there is double the impact of investment in this part of the country because of the geography of the region.”
The bill rises for England and Wales, averaging £31 a year, would begin to take effect from April.
Mike Keil, from the Consumer Council for Water, said water companies “need to be better at reading the room” as he described public anger over pay and bonuses.
He warned a million households would be in water poverty with rising bills
Water UK’s chief executive David Henderson told MPs that poor performance was down to not having “sufficient funds to invest” in the face of growing challenges from climate change and increased water demand, as regulator Ofwat kept down bills.