South West Water bosses blocked from bonuses after one-star environmental rating
Regulators say the water sector's environmental performance has hit a record low
Bosses at South West Water will be automatically blocked from receiving bonuses after regulators gave the company a one-star rating for its environmental performance.
The rating is described as poor, and was handed out in the first joint report by the Drinking Water Inspectorate, the Environment Agency, Natural Resources Wales and Ofwat.
Southern Water, Thames Water and Yorkshire Water also received one-star ratings.
The report was published on Thursday.
What the report found
Regulators said the water sector's environmental performance fell to a record low in 2025, despite reforms and investment.
Eight of the nine water companies in England were rated either poor or requiring improvement. Only Severn Trent received the highest rating.
Together, the companies' ratings added up to 16 stars out of a possible 36. That is down from 19 the year before and the lowest since the process began.
Regulators said pollution and environmental permit breaches are still happening, and described the number of serious pollution cases as a major concern.
The report also found drinking water quality remains among the best in the world, with 99.97% of tests meeting the required standards.
Bonus ban and government response
Under rules introduced last year, water companies with one-star ratings are automatically blocked from giving bonuses to their bosses.
Environment Secretary Dame Angela Eagle has summoned water bosses to Whitehall to explain their failures and outline immediate action.
She will set out improvement actions for each firm, including tackling leakage from pipes, delivering sustained reductions in pollution and improving customer satisfaction scores.
Officials said she is looking at options for further action against failing firms.
Dame Angela will also look to strengthen the bonus ban rules, after recognising that executives are still being rewarded in ways that skirt them. Further details are expected in the coming weeks.
Dame Angela said: "Water companies have let the public down time and time again, and today's report is further proof that root-and-branch reform cannot wait."
She said: "We are getting on with the job of building a water system that finally works for the people who pay for it."
Reaction
Philip Duffy, chief executive of the Environment Agency, said: "Today's report shows good performance on drinking water quality, but on wastewater and pollution the sector is still falling short."
Mike Keil, chief executive of the Consumer Council for Water, said: "Customers expect more for their money at a time when many water companies are failing to meet their commitments on key service areas which affect people's lives and the environment."