Water companies pay £1bn dividends as the taps run dry

Water companies have been accused of putting “shareholders before people” after analysis by The Times revealed that they have handed out more than £1 billion in dividends in the past year.

MPs and campaigners have urged ministers to “get tough” on water and sewage firms as their profits rise while drought conditions set in.

Amid mounting criticism of the response to the drought by the 15 companies in England, it emerged that dividend payments to parent companies totalled £1.1 billion in the past year, up 18.7 per cent on the previous 12 months.

An analysis of Companies House records found that chief executives at the companies earned £34.1 million in the past two years, including £22 million in bonuses and incentives.

Thames Water, which has said it will ban hosepipes in the coming weeks, paid shareholders £37.1 million last year and £1.6 billion over the past 12 years.

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The company, England’s largest, loses 605 million litres a day through leaks, the most of any English firm. Its chief executive, Sarah Bentley, received £3.2 million in the past two years. Bentley, who lives in a £1.5 million five-bedroom home in Surrey and has been pictured holidaying in the French ski resort of Saint-Martin-de-Belleville, received a £496,000 bonus last year, almost double her previous year’s performance-related payout, plus a salary of £750,000.

Sarah Bentley’s £1.5 million home in Surrey

Yorkshire Water and Thames Water, previously pledged not to pay dividends following pressure from Ofwat, the industry regulator, in 2017 to bolster their finances. They paid a total of almost £89.7 million to their shareholders over the past year.

It comes as industry leaders were urged by the Consumer Council for Water to “step up” efforts to tackle leaks that result in millions of litres of water being lost and “dampen people’s enthusiasm” for trying to reduce their consumption.

Ofwat, the industry regulator, said that it was clear that companies needed to “clearly show how their dividend payments relate to their performance and that it was seeking “new powers to block dividends if a company is putting their financial stability at risk in making them”. A spokesman said: “Customers are rightly concerned that companies pay out dividends even where they fall well short of their obligations to customers and the environment. In a sector that provides an essential service, where customers cannot choose their supplier, it is important that customers and wider stakeholders can understand and have confidence in how decisions companies make about dividends relate to overall performance.”

Tim Farron, the environment spokesman for the Liberal Democrats, said that the hosepipe bans being put in place across England could have been avoided “if water firms invested properly in infrastructure”. Farron told The Times: “They are putting shareholders before people and the environment. These are the same companies which have poisoned our rivers with disgusting sewage because of a lack of investment. It is time someone stood up to these profiteering firms.”

Thames Water staff have been delivering bottles of water to people in Bexley, southeast London, after a burst pipe cut off supplies

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He added: “They [ministers] have let them shell out millions to their shareholders and CEOs in bonuses whilst failing to fix leaking pipes. We wouldn’t be in this mess if water firms invested properly in infrastructure.”

Ash Smith, of Windrush Against Sewage Pollution, a water quality campaigning group, said: “For about 30 years, monopoly water companies have been annually milking captive billpayers and removing money in dividends and bonuses that should have been spent on preventing pollution and water leakage. The impacts are now hitting so hard they cannot be ignored or covered up any longer.

“A shocking scandal is being revealed by campaigners and journalists and our government and regulators have an awful lot of explaining to do, which may be why they are still trying to keep the worst secrets under wraps.”

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Yorkshire Water paid £52.6 million in dividends in the past year. The company leaks 291 million litres a day according to industry figures. Its chief executive, Liz Barber, received a pay package worth over £2.7 million in the past two years.

Peter Simpson, chief executive at Anglian Water, made £1.3 million last year, but Anglian said that this year “all senior management and director bonuses were significantly reduced”.

Anglian Water’s Peter Simpson

United Utilities, which serves northwest England, paid £296 million in dividends in the past year, the most paid by any water company. The company, which has paid almost £3.1 billion in dividends since 2010, the highest amount in that period, leaks 413 million litres of water a day.

Its chief executive Steve Mogford, earned almost £3.1 million in the past year, including almost £2.2 million in bonuses and incentives. Mogford, 66, splits his time between his country home — featuring stables and an outdoor school — and the Balearic island of Menorca, where he owns a villa in Sant Lluís.

Severn Trent Water, which serves the Midlands, paid about £254.5 million in dividends in the past year. The company, which has paid £2.5 billion in dividends in the past 12 years, leaked the second largest amount of water of any English water company, with a three-year average of 446 million litres a day.

Liv Garfield, its chief executive, has earned almost £7 million since 2020, making her the highest-paid executive in England’s water industry.

Water UK, which represents the industry, said that dividends in the past two years had averaged three per cent in line with Ofwat’s expectations and that the majority of companies either lost money or failed to achieve expected returns.

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A spokesman for the body said: “Private investment has brought more than £160 billion into an industry that was previously starved of cash while improving water company efficiency by over 70 per cent.

“That efficiency has allowed bills to remain around the same level, in real terms, for over a decade.”

A spokesman for Yorkshire Water said that shareholders had not been given dividends for the past five years and that the company had instead invested £2.5 billion in “maintaining, innovating and growing the business.”

A spokesman for United Utilities said: “Our shareholders, many of whom are pension funds, deserve a fair rate of return on their investment. They have helped us invest £15 billion over the last ten years in maintaining and improving our services for 7 million customers, £500 million of which was outperformance payments that we chose not to return to shareholders.”

Severn Trent Water declined to comment. Thames Water did not respond to a request for comment.

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