• Bonus ban has stopped over £10 million being paid to water bosses since June 2025
• Environment Secretary warns against the use of loopholes that undermines the spirit of the bonus ban
• Ofwat will begin a wide-ranging review of water boss pay and bonus ban loopholes

Water bosses must not be allowed to dodge the government’s bonus ban by disguising bonuses as other forms of pay, the Environment Secretary has warned today (12 November).

A review of the bonus ban rule begins today, which Dame Angela Eagle has asked must be wide-ranging as she moves to close the loopholes that reward failure.

The government's ban has already stopped over £10 million going to water bosses since it was introduced. With nine water companies triggering the ban in the last financial year alone, and more than £6.5 million of potential bonuses blocked.

Yet, some executives have seen their total pay rise over 2025-26 despite continued poor performance. 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.

The public can have their say in Ofwat's four-week call for evidence, closing on 10 December. The findings will inform the government’s work to strengthen accountability in the water sector, including through the strengthened Water Bill.

Environment Secretary Dame Angela Eagle said:

"People are sick of seeing water bosses profit while rivers are polluted and customers are repeatedly let down. 

"A wide-ranging review launching today will ensure that failure doesn't pay, whatever name the payment goes by. 

"The bonus ban was the first step. Where there are loopholes, I want them closed."

 The action follows the first ever joint report from the regulators which leaves nowhere for underperforming companies to hide. By pooling their data, the regulators are closing the gaps that let failing firms point to a good score from one regulator while falling short with another.

It is published alongside the Environment Agency's Environmental Performance Assessment Report, which shows that pollution incidents remain far too high, with only one company achieving the top four-star rating.

One-star ratings automatically mean that bonuses will be blocked for executives at Southern Water, Thames Water, South West Water and Yorkshire Water. The same applies to any company with a Category 1 pollution incident, which has a major, serious, persistent or extensive impact on the environment, people or property.

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

This is part of the government's plan to put the public back in control of water. The Environment Secretary has already set clear expectations for the next Price Review, warning companies they must deliver better value for money for struggling households. Eight new regional water councils will give local people a say, and a strengthened Water Bill will give the public stronger control and accountability.