Committee publication · Correspondence · 13 May 2025

Correspondence to Lawrence Gosden, CEO, Southern Water regarding Reforming the water sector inquiry, dated 13 May 2025

From: Environment, Food and Rural Affairs Committee

Summary

The Environment, Food and Rural Affairs Committee writes to Lawrence Gosden, CEO of Southern Water, requesting detailed information on remuneration models and dividend policies, spending on legal fees and advertising, and asset replacement rates. The committee seeks cross-industry understanding of practices it views with concern, particularly regarding bonuses, dividends, and expenditure on litigation against regulators.

Key findings

Committee remains concerned about bonus culture and dividend-paying practices with varying standards across the water sector.
Committee is concerned about bill payer money being spent on advertisements and legal action against regulatory bodies (Ofwat, Environment Agency, Drinking Water Inspectorate).
Committee has heard that asset replacement rates may not be sufficiently high across the sector.
Committee requests five-year breakdown of remuneration policy changes, dividend policies tied to performance, and legal/advertising spend rationale.
Committee seeks details on asset replacement rates during Asset Management Period 7 and projected changes for Asset Management Period 8.

Tone

Adversarial

Topics

water-sector-regulationexecutive-remunerationutility-pricinginfrastructure-assets

Key actors

Environment, Food and Rural Affairs Committee, Lawrence Gosden, Southern Water, Ofwat, Environment Agency, Drinking Water Inspectorate

Notable line

“My Committee remains concerned about the culture of bonuses and paying dividends and the varying standards being applied.”

Key Quotes

“My Committee remains concerned about the culture of bonuses and paying dividends and the varying standards being applied.”
— Environment, Food and Rural Affairs Committee · Opening concern regarding remuneration models

“My Committee is also concerned about bill payer money being spent on advertisements and legal action against Ofwat, the Environment Agency and the Drinking Water Inspec torate.”
— Environment, Food and Rural Affairs Committee · Addressing spending on litigation and marketing

“My Committee has heard that replacement rates for assets may not be sufficiently high across the sec tor.”
— Environment, Food and Rural Affairs Committee · Raising concerns about infrastructure investment levels

View original document →

Source · parliament.uk record ↗