Southern Water boss defends six-figure bonus in Parliament

In an inquiry today by the Environment, Food and Rural Affairs Committee, Chief Executive Lawrence Gosden argued that the industry had been playing catch up on investment after 15 years of 'flat bills' and curbs.

This follows an announcement from industry regulator Ofwat that Southern Water customers would see a 53 per cent increase in bill prices by 2030 - the highest increase of any company.

But this news - which would cost customers an extra £642 on average - came while tens of thousands of homes were left without water for two days in December.

READ MORE: Huge rise in bills announced - as residents remain without water for second day

Lawrence Godsen, Chief Executive of Southern Water, said that the outage happening in the first place was ‘completely unacceptable’ and that the company’s response was not ‘good enough’ to similar incidents.

But when questioned by MPs about the price hike, Mr Gosden said investment needs relate ‘simply to geography.’

He argued that the south-east of England is designated as water stressed and has a huge population, meaning it has less rainfall per capita than Namibia in Africa.

READ MORE: Southern Water reveal cause of major Hampshire water outage

“That means that we have very large forward investment plans for water resources,” Mr Gosden said.

“So, there’s a very large water resources to safeguard this part of the country from climate change and that is on top of a very significant environmental improvement and investment programme to redesign sewer systems basically, so effectively there is double the impact of investment in this part of the country because of the geography of the region.”

Helena Dollimore MP questioned why Mr Gosden took a bonus if he accepts handling of outage incidents were 'not adequate.' (Image: parliamentlive.tv) Helena Dollimore, Hastings and Rye MP, slammed Mr Gosden’s claim that the response to incidents was not ‘good enough.’

Ms Dollimore said: “If you accept that your handling of these incidents is not adequate and that those incidents should have never happened in the first place, why did you choose to take a bonus of £160,000 in July last year?”

Mr Gosden said that he declined a bonus for his first year because it was ‘just not right’ to take a bonus in a year when the water sector was ‘coming under such scrutiny and public concern.’

He then defended his six-figure bonus by saying that most of it was ‘disqualified,’ and the £160,000 that was awarded was ‘directly related’ to achieving targets in water quality improvements and safety improvements only.