Water privatisation ‘not working’ as bosses paid £70m over the last six years Pay for top executives at England’s nine water companies stands at average of £1.2m – but industry defends record

The bosses of England’s nine largest privatised water companies were criticised yesterday after it was revealed they have earned £70m in the last six years despite complaints of rising bills and low corporate tax contributions.

An analysis of the pay and benefits received by the highest-paid executive at each of the companies found they received £11m between them in 2018 – equivalent to an average of £1.2m each.

Renationalisation demand

The highest paid water boss was Liv Garfield, the chief executive of Severn Water, who received £2.08m in pay and benefits last year. She was closely followed by Steve Mogford, chief executive of United Utilities, whose remuneration package was worth £2.07m.

The i newsletter latest news and analysis Email address is invalid Email address is invalid Thank you for subscribing! Sorry, there was a problem with your subscription.

The GMB trade union, which compiled the figures along with campaign group Corporate Watch, pointed to figures showing that average water bills in England and Wales rose by 40 per cent between 1989 and 2015, and said the record of the water companies justified their renationalisation some three decades after privatisation under Margaret Thatcher.

Tim Roache, the union’s general secretary, said: “Customers are forking out tens of millions to private water’s top brass through their ever increasing bills, while billions of gallons are wasted every year and we get whacked by hosepipe bans in the summer. I’m not sure how much more evidence is needed to show that this is not working.”

Substantial profits

The water industry in England was one of a slew of public sector utilities to be privatised under Margaret Thatcher. Critics have complained at a lack of the pricing competition for consumers seen in other privatised industries while companies have extracted substantial profits.

The water companies insist they have invested heavily since privatisation, spending £160bn since 1989 and reducing leakage by a third. They also claim that renationalisation, as advocated by the Labour Party, would hit pension funds and be ruinously expensive at £90bn – a figure disputed last month by a separate analysis suggesting the cost could be as little as £14.5bn.

The industry has also come under criticism from Environment Secretary and Tory leadership contender Michael Gove, who last year accused it of paying little or no tax while delivering large dividends for shareholders and generous pay packages for its executives.

‘Delivering for customers and environment’

In a statement, industry body Water UK accused the GMB of presenting a “misleading” picture. It said: “The truth is that bills have fallen in real terms for the last five years and will continue to fall over the next five. We’re delivering for customers and the environment.”

Severn Trent said Ms Garfield, formerly head of BT’s Openreach division, had led “significant improvement” in its services while maintaining the lowest bills in England for ten years in a row.

Ms Garfield’s pay and benefits were £366,000 lower than 2017, largely due to a fall in her bonus payments and share awards. Her salary last year was £687,000 compared to £637,000 the previous year and her remuneration package has risen by 27 per cent since 2013.

Mr Mogford’s income fell by £69,000 compared to 2017, though his remuneration package has increased by 34 per cent since 2013. A spokesperson for United Utilities said: “Steve Mogford’s remuneration is directly linked to the delivery of stretching targets for customer service and environmental performance and United Utilities has achieved leading status in both.”