YORKSHIRE Water is among nine water companies prevented from using billpayer money to fund £6.8 million of “unjustifiable” bonuses under new powers handed to the regulator.

Ofwat said owners and shareholders of the water firms will instead have to pick up the tab for the payouts after it found they were not linked closely enough to company performance.

Yorkshire Water, along with Thames Water and Dwr Cymru Welsh Water were directly blocked from allowing customers to pay £1.55 million of bonuses.

The water firm, which has its headquarters off Halifax Road in Bradford, said it “understands the strength of feeling around rewarding executives” and said it would be reflecting on Ofwat’s comments.

The watchdog said a further six companies had voluntarily decided not to push the cost of executive bonuses worth a combined £5.2 million onto customers, with shareholders instead paying.

Ofwat also took action against £616,000 worth of payouts for top bosses at Yorkshire Water and £163,000 of bonuses at Dwr Cymru Welsh Water.

David Black, chief executive of Ofwat, said: “In stopping customers from paying for undeserved bonuses that do not properly reflect performance, we are looking to sharpen executive mindsets and push companies to improve their performance and culture of accountability.

“While we are starting to see companies take some positive steps, they need to do more to rebuild public trust.”

Ofwat said it would be able to block bonus payouts entirely under the new water Bill being brought by the Government.

Vanda Murray, chair of Yorkshire Water, said: "Ofwat's executive remuneration report has outlined changes in the way executives should be paid.

“Our board and remuneration committee understand the strength of feeling about rewarding executives and believe it is important to reward performance to attract and retain the right calibre of talent to drive forward our improvement plans at a hugely difficult time for the sector.”

She added: “We reflected hard on the performance of the business through various metrics at the end of 23/24.

“These metrics included environmental performance but also important measures such as customer service and leakage where the business delivered well.

“The outcome against the performance measures was a 61.2 per cent bonus of the maximum allowance, which was reduced by the independent remuneration committee to 42.2 per cent (a reduction of around a third) to take into account the company’s environmental performance not being where we wanted it to be.

"Nevertheless, Ofwat has made a clear statement today and we will be reflecting on their comments."