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Committee publication · Correspondence · 9 June 2025

Correspondence to David Black, Chief Executive, Ofwat regarding Thames Water Management Retention Plan and ownership developments, dated 9 June 2025

From: Environment, Food and Rural Affairs Committee

Inquiry: Reforming the water sector

Summary

The Environment, Food and Rural Affairs Committee writes to Ofwat's Chief Executive seeking clarification on Thames Water's Management Retention Plan (MRP) payments and KKR's withdrawn takeover proposal. The committee notes that despite the Secretary of State's expectation that Ofwat would block these payments under the Water (Special Measures) Act, Thames Water claims the scheme is merely paused, not withdrawn, and has already paid 50% of base salary to 21 senior executives on 30 April with no intention to recover these sums.

Key findings

  • Thames Water's Chair stated the MRP scheme has been 'paused' rather than withdrawn, contradicting the Secretary of State's assertion that the company had dropped the proposals
  • The first tranche of 50% of base salary payments totalling an unspecified sum was made to 21 senior executives on 30 April 2025, with the Board declining to recover these payments
  • The Secretary of State expressed concern that Thames Water was 'attempting to circumvent' the bonus ban under the Water (Special Measures) Act by renaming bonuses as MRP payments
  • The committee seeks clarification on discussions between Ofwat and Thames Water regarding the MRP and the status of the withdrawal of KKR's takeover proposal

Tone

Procedural

Topics

water-utilitiesregulationexecutive-paycorporate-governance

Key actors

David Black, Ofwat, Thames Water, Environment, Food and Rural Affairs Committee, Secretary of State for Defra, KKR

Notable line

“Thames "appeared to be attempting to circumvent that ban, calling their bonuses something different so they can continue to pay them"”

Key Quotes

“Thames "appeared to be attempting to circumvent that ban, calling their bonuses something different so they can continue to pay them", and that they had now "dropped these proposals"”
— Secretary of State for Defra · evidence to the committee regarding Thames Water's MRP payments
“… the scheme has not been withdrawn but "paused" awaiting guidance from Ofwat”
— Thames Water Chair · in correspondence to the committee about the MRP status
“… does not intend to recover" these payments”
— Thames Water Board · regarding the 50% base salary payments made on 30 April to senior executives
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Source · parliament.uk record ↗