Wessex Water Ex-CEO Receives £170,000 Bonus Amid Sewage Scandal
Despite a government ban on performance-related pay following criminal pollution failures, the former chief executive of Wessex Water, Colin Skellett, received a £170,000 bonus from its parent company last year, sparking outrage from opposition parties and raising questions about the effectiveness of current regulations. Skellett’s total remuneration from YTL Utilities (UK) reached £693,000, including the contentious bonus, according to the company’s accounts extending to June 2025.
Bonus Sparks Criticism of “Weak” Government Ban
The bonus has drawn sharp criticism, with the Liberal Democrats arguing that the government’s attempts to curb excessive payouts to water company executives are demonstrably insufficient. “It is absolutely disgusting that the chief executive receive any kind of bonus after Wessex Water’s reckless and blatant disregard for nature, and even more disgusting that Ofwat allowed them to accept it on a technicality,” stated Anna Sabine, the Liberal Democrat MP for Frome and East Somerset. “The government needs to get far tougher with these water companies to end the sewage scandal, and put a full stop to bonuses until they do.”
Criminal Conviction and Subsequent Fines
Wessex Water was prohibited from awarding bonuses for the year following a criminal conviction in November 2024. The conviction stemmed from a sewage pumping station failure six years prior that resulted in the death of over 2,000 fish and a £500,000 fine for the company. Further compounding the issue, Wessex Water was recently fined an additional £11 million last month due to further sewage failures.
Regulator Claims Bonus Was for Separate Role
However, the water industry regulator, Ofwat, maintained that Skellett was legally entitled to the bonus because it was linked to a distinct aspect of the parent company’s operations. YTL is currently involved in a large-scale development project, Brabazon, encompassing housing, offices, and an arena north of Bristol. A spokesperson for both Wessex and YTL clarified that the bonus “entirely relates to his new role and was entirely funded by YTL,” adding that Skellett is now responsible for YTL UK group businesses, including the Brabazon New Town development.
Long-Term Compensation and Transparency Concerns
The controversy surrounding executive pay within the water industry has intensified in recent years, fueled by widespread public anger over the persistent issue of sewage leaks into British rivers and seas. While Skellett received £157,000 from Wessex Water for a three-month period from July to September 2024, following his departure as chief executive after 36 years of service, he continued to hold the position of chief executive within the parent company, maintaining a substantial salary.
Despite YTL characterizing his position as a “new role,” records show Skellett has been a director of YTL Utilities (UK) since May 2002. Over the past decade alone, he has accumulated £8.4 million in pay from this role, including £3.4 million in bonuses. This figure is double the £4.2 million he earned from running Wessex Water Services during the same period, bringing his total earnings over ten years to £12.6 million.
Concerns regarding a lack of transparency in payments to water company executives from affiliated companies have been raised by both Members of Parliament and Ofwat. Recent reporting by The Guardian in August revealed that Nicola Shaw, the boss of Yorkshire Water, received £1.3 million in undisclosed extra pay through an offshore company, a payment Ofwat also permitted as it did not qualify as a performance-related bonus. Shaw acknowledged to the BBC earlier this month that hiding these payments was a “mistake,” but stopped short of committing to forgo the additional compensation.
Regulatory Changes and Future Oversight
In response to The Guardian’s reporting, Ofwat has initiated consultations on changes to mandate water companies to disclose all remuneration received from related entities starting next year. Ofwat itself is slated for abolition and replacement with a new regulatory body, with the government’s plans for the water sector expected to be detailed in a white paper in January.
YTL, originally founded by the late billionaire Yeoh Tion Lay, acquired Wessex Water in 2002 from the collapsed US energy firm Enron. The company is ultimately controlled by an entity based in Jersey. YTL Utilities (UK) considers Wessex Water its “principal subsidiary,” generating the majority of its £1 billion in annual revenue – £653 million from Wessex Water and £240 million from Water2Business, a joint venture with Pennon Group. The company also reported a £1.6 million profit from £110 million in revenue generated by its property development ventures.
Skellett’s remuneration from YTL remained consistent with the previous financial year, at £691,000, in addition to his £313,000 pay from Wessex Water. He received the same £170,000 bonus in 2024, pushing his total earnings for that year above £1 million.
A spokesperson for the environment department asserted that the government has implemented “the toughest enforcement framework the sector has ever seen,” including the introduction of criminal liability for executives who conceal illegal sewage spills and the power to prohibit unfair bonuses, resulting in £4 million in blocked bonuses for ten water bosses this summer.
An Ofwat spokesperson emphasized the positive impact of the new rule on executive performance-related pay, stating that over £4 million in potential bonuses had been blocked in 2024-25. The spokesperson clarified that Wessex Water did not award any performance-related pay for its regulated activities and that the payment to Skellett fell outside the scope of the rule as it was tied to work unrelated to the regulated company. “Transparency matters for customers and the public,” the spokesperson added, noting that proposed updates to water company annual reporting will include more transparent disclosures on remuneration for the next financial year.
