Southern Water has paid its chief executive Ian McAulay a £538,100 bonus despite reporting an ‘unacceptable’ rise in pollution across its network.
The award took his total annual pay and pension to £1.1million, more than double his basic salary of £435,000. The company said in its annual report that it had 434 pollution incidents in the year to March 31, 2020 – more than the previous three years combined.
Last year, Southern Water, which is part-owned by Hong Kong billionaire Li Ka-shing, was ordered to pay record penalties of £126million after it emerged that it had been pumping contaminated water into rivers and the sea for years.
Paying the penalty: The water regulator Ofwat said that Southern Water had attempted to ‘deceive customers’
The water regulator Ofwat said that Southern Water had attempted to ‘deceive customers’ over the incidents, which had taken place over seven years to 2017. Ofwat said Southern Water had falsified records to cover this up, claiming the water had been clean.
Southern Water blamed the failures on its previous management which it said had been guilty of ‘dishonesty’. McAulay was hired to replace the previous chief executive, Matthew Wright, who left the firm in 2017. McAulay was paid £1.2million the previous year, which included a £570,300 bonus and a £76,200 relocation award.
In its most recent report, Southern Water reported seven serious ‘category one and two’ events in the year to March 31, 2020, the same as the previous year and double that of the year ending March 31, 2017.
But it also said the number of ‘less serious’ ‘category three’ events had risen sharply to 427. It described its own performance as ‘not acceptable’ and said that it had invested £54million in the year in an attempt to make improvements.
Southern Water provides water to 2.6million customers and wastewater services to more than 4.7million customers across Sussex, Kent, Hampshire and the Isle of Wight.
In a statement last night Southern Water insisted McAulay is the ‘lowest paid of the water and wastewater companies’. It added that he has been giving 20 per cent of his salary to charity since the Covid-19 crisis began.
The firm blamed its own increased reporting of incidents and ‘heavy rainfall – particularly after dry periods’ for the steep increase. It said: ‘There is a higher incidence of blockages where flows have been lower, as fats, oils and grease, and wet wipes are not flushed to our wastewater treatment works.’
It added: ‘Our analysis found one of the biggest causes of pollutions from our assets is the resilience of the power supplies at our sites, which lead to power outages, and occasionally mean we have to restart our works.
‘We are working with partners across the South East, including energy network providers, to understand if there is a network issue and how this can be resolved.
Southern Water said it had put a dedicated team in place with a ‘pioneering’ plan agreed with the Environment Agency ‘to address our unacceptable pollutions’. The action demonstrates its commitment to reducing pollution incidents and helping to improve the environment, it said.
Nick Mills, head of pollution and flooding resilience at Southern Water, said: ‘We’re very much a company in transformation and have undergone significant cultural changes. This has affected our reported performance in 2019 and the size of the challenge ahead of us. We are confident this plan and future iterations of it will allow us to reduce the number of pollutions incidents.’