Yorkshire Water CEO defends 41% bill increase and £371,000 bonus

The chief executive of Yorkshire Water, Nicola Shaw, has defended the company’s proposal to raise customer bills by 41%, following her receipt of a six-figure bonus. The Water Services Regulation Authority (Ofwat) reports that average water rates in Yorkshire are projected to reach £607 annually within the next five years, representing an increase of £177. Ms. Shaw informed the BBC that this price increase is intended to fund supply upgrades and contribute to the reduction of sewage discharges and storm overflows. Regarding her acceptance of a £371,000 bonus, Ms. Shaw stated that she had achieved various targets and emphasized that the funds originated from shareholders, not customers. She told the BBC, “My shareholders are paying for that bonus and want to make sure I am incentivised to keep turning the business around and to make sure these investments work for Yorkshire.” It was noted that Ms. Shaw declined a bonus in 2022, the year she commenced her role. She also mentioned that £8.3 billion is being invested into Yorkshire Water across its service area, “from Whitby to Sheffield.” When questioned about the possibility of the company borrowing money or sourcing funds from investors instead of customers, she responded that it was “doing both,” with investors contributing £500 million over the next two years. Ms. Shaw acknowledged that the proposed increase would affect some individuals and confirmed that the company has allocated £55 million to assist those facing financial difficulties. The BBC previously reported that the firm’s most recent financial statements indicate accumulated debts totaling £6.2 billion and dividend payments, separate from its profits, amounting to £522 million since the 2017-18 financial year. This information emerged amidst ongoing demands from campaign groups for Ms. Shaw to return the £371,000 bonus, which was received during a period when Yorkshire Water incurred a £47 million fine for past sewage spills and inadequate customer service. Concurrently, Ofwat announced that the average national water bill is set to increase by £86 starting in April for one year, after which it is expected to stabilize. David Black, Chief Executive of Ofwat, stated that in addition to reducing sewage spills, the investment would also aim to decrease leaks and improve customer service. He further noted that approximately £104 billion is available for upgrading water systems, which will result in “cleaner rivers and seas and secure long-term drinking water supplies for customers.” Regional variations exist in bill increases, with Southern Water customers experiencing the most significant rise, an average of 53% to £642 by 2030. In contrast, Wessex Water and Northumbrian Water bills are projected to increase by 21%.