Ofwat will be granted fresh powers to ban bonus payments to water firm executives, who could also be held criminally liable for lawbreaking, according to a new bill outlined in the King’s Speech today.
The Water (Special Measures) Bill will grant the water regulator new powers to ban top bosses from receiving bonus payments if environmental standards are not met, as well as ensuring executives “face personal criminal liability for lawbreaking”.
It comes after significant public outcry over sewage spills in rivers, lakes and seas amid rising bills and the potential collapse of debt-laden Thames Water, which has effectively been placed into special measures.
The firm says it could be set to run out of cash within a year, and investors are preparing for the company’s debt to be downgraded to junk status.
While just yesterday Ofwat said it was investigating all 11 of the UK’s water companies as Londoners’ bills were poised to rise by £99 over the next half-decade.
Speaking in the House of Lords, King Charles said: “My government recognises the need to improve water quality and a bill will be introduced to strengthen the powers of the water regulator.”
The bill proposes to introduce a new code of conduct for water companies, meaning customers can summon board members and hold executives to account.
It would also introduce new powers to bring automatic and severe fines, as well as requiring water companies to install real-time monitors at every sewage outlet with data independently scrutinised by the water regulators.
The government says this will strengthen the enforcement regime and make clear that ministers will not tolerate poor performance across the water sector.
Most measures will apply across England and Wales, and the government says it will outline further legislation aimed at transforming the water industry and restoring rivers, lakes and seas.
Environment secretary Steve Reed called water company bosses in for crunch talks last week.
Ofwat has been approached for comment.