The water industry watchdog is probing payments to the bosses of a string of suppliers following the revelation that Yorkshire Water’s offshore parent company had handed its chief executive more than £1m in previously undisclosed fees.
Sky News has learnt that Ofwat, which is to be abolished by the government in the coming years, wrote to a number of water companies earlier this month to scrutinise similar remuneration arrangements to those employed by Yorkshire Water and its holding company, Kelda Holdings.
Industry sources said on Monday that some of the biggest operators in the sector were among the recipients of Ofwat’s letter.
Disclosure of the regulator’s enquiries comes in the wake of a report in The Guardian which said Nicola Shaw, the Yorkshire Water boss, had received payments of £660,00 from Jersey-registered Kelda in each of the last two financial years.
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A source close to Ofwat insisted that its investigation of similar pay arrangements had been planned prior to the reporting of Ms Shaw’s remuneration.
“We are currently reviewing water companies’ compliance with the performance-related pay prohibition rule.
“As part of this assessment, we have written to several companies to request more information on the remuneration decisions they have set out in their annual accounts.
“Where we find evidence that a company has breached the rule, we have powers to direct companies to take remedial actions which, if not complied with, can result in companies facing enforcement action – including financial penalties.”
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Water industry pay has become an increasingly incendiary topic in recent months amid a slew of fines levied against operators across Britain for their failure to prevent leaks and major pollution incidents.
Sky News revealed earlier this month that David Black, the Ofwat chief executive, would step down following the publication of a government-commissioned review calling for the body to be scrapped.
