On my return from drought-worried France at the end of last week I picked up a short comment in Saturday’s Independent [scroll to the bottom] entitled ‘Baggs bags half a million bonus as water bills rise’.

Apparently in France – where even bigger water bills rises are now expected than the 5.7% recently approved by Ofwat for England and Wales – Le Parisien has compared prices in various European countries and found the cost of clean water in the UK to be the highest. The figures in Euros per cubic metre are: UK, 3.79; Belgium, 3.51; France, 3.09; Spain, 2.11; and Italy, 0.88. (Does this question Ofwat’s assertion that it has driven down the cost for UK customers?)

The article goes onto suggest the UK’s high water price is needed to help pay Thames Water’s boss, Martin Baggs, a reported £500,000 bonus on top of his already £1.1 million salary. What is not mentioned is that this half-a-million bonus is not so large given that (the now retired) Philip Green of United Utilities took home annual bonuses in 2010 and 2011 of not far short of a million pounds!

(What these bonuses were for is a really interesting question. During his tenure Mr Green, rather than growing the company, basically sold off all the businesses acquired since privatisation, thus returning it to being a purely regulated water utility, similar in size and shape to the original ‘North West Water’ that was created way back in 1989!)

The amounts leaders of the UK’s regulated water businesses pay themselves is scandalous when you consider that – unlike banks and other corporations where big-bucks CEO salaries have become the norm – water leaders operate only pseudo-commercial, monopolistic businesses. The sooner the water industry gets back to being a ‘servant’ of the communities it serves, and Mr Baggs starts working on creating innovative solutions to tackle the South of England’s water shortages, the better.

Roger Ford

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