Scandal-hit Wessex Water ex-boss was paid £170,000 bonus despite ban

Wessex Water was subject to a bonus ban after being criminally convicted in November 2024 over a sewage pumping station failure.

The incident occurred six years earlier and resulted in the deaths of more than 2,000 fish.

The company was fined £500,000 over the offence.

In June, the Government prohibited bonuses for the 2024-25 financial year for chief executives and finance directors at Wessex Water and five other water companies.

Last month, Wessex Water received a further £11million fine for additional sewage failures.

The Liberal Democrats criticised the payment, arguing it showed the bonus ban did not go far enough.

Anna Sabine, the Liberal Democrat MP for Frome and East Somerset, said: "For far too long, water company fat cats have been taking huge bonuses for pouring filthy sewage into our rivers."

"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."

She called on ministers to take tougher action against water companies and said bonuses should be stopped until pollution problems are addressed.

Ofwat said Mr Skellett was allowed to keep the bonus under existing rules because it related to work carried out outside Wessex Water’s regulated activities.

YTL is developing housing, offices and an arena at Brabazon, north of Bristol.

A spokesman for Wessex Water and YTL said the bonus related entirely to Mr Skellett’s role within the wider YTL UK group.

"The bonus entirely relates to his new role and was entirely funded by YTL.

"In his new role Colin is responsible for YTL UK group businesses including the development of Brabazon New Town."

The company rejected claims the payment exploited a technicality.

The spokesman said the bonus covered the nine months following Mr Skellett’s departure from Wessex Water.

An Ofwat spokesman said: "Wessex Water did not award any performance-related pay for its regulated activity."

"The payment to its former CEO was outside the scope of the rule as it was awarded for work not related to the regulated company."

Despite Wessex Water describing the position as a new role, Mr Skellett has been a director of YTL Utilities (UK) since May 2002.

Over the past decade, he has received £8.4million in pay from YTL, including £3.4million in bonuses.

This compares with £4.2million earned for running Wessex Water Services over the same period.

Combined remuneration from the two roles totalled £12.6million over 10 years.

Mr Skellett led Wessex Water for 36 years before stepping down in September 2024.

He received £157,000 for his final three months in the role.

The payment has added to wider scrutiny of water industry executive pay.

In August, it emerged Yorkshire Water chief executive Nicola Shaw had received £1.3million in additional pay through an offshore company.

Ms Shaw later told the BBC failing to disclose the payments had been a mistake.

The Government defended its approach to enforcement in the sector.

A spokesperson for the environment department said it had introduced the toughest enforcement framework the industry has seen.

"For the first time, we introduced criminal liability for water bosses who cover up illegal sewage spills, and the power to ban unfair bonuses.

"This resulted in £4million in bonuses for 10 water bosses being blocked this summer."

The spokesperson said the Government expects water companies to follow both the letter and spirit of the law.

Ofwat said its rules prevented more than £4million in potential bonuses during the 2024-25 financial year.

The regulator is consulting on updated annual reporting requirements from next year to improve transparency around executive pay.

Ofwat itself is set to be replaced.

A Government white paper outlining plans for a new water regulator is expected in January.