Yorkshire Water bosses blocked from bonuses after new report reveals one-star rating
Yorkshire Water has received a one-star rating in a recent report.
Yorkshire Water is amongst four UK water boards that received a one-star rating in a recent environmental performance report.
The one-star (poor) rating is a downgrade from 2024, when they were given two-stars (requires improvement). This means the company will be automatically blocked from giving out bonuses to bosses under new rules introduced last year.
Regulators including The Drinking Water Inspectorate, Environment Agency, Natural Resources Wales and Ofwat joined together to create the report that outlines the water sectors’ performance in 2025.
It was published on Thursday, October 28, 2026 and revealed how the water sector’s environmental performance fell to a record low last year, despite reforms and investment.
In relation to the downgraded rating, a Yorkshire Water spokesperson said: “Our environmental performance last year was not good enough and we understand that customers will be disappointed by this result. In particular, we need to reduce pollution incidents and improve the reliability of our environmental performance.
“We are not waiting for these assessments to tell us that. We have already changed the way we are tackling pollution, with greater operational focus on preventing incidents, improving the health of our assets, and identifying problems earlier.”
This comes after the news that road users and residents in Sheffield could soon face disruption as Yorkshire Water begins their £3.6m scheme to replace 9km of water pipes in Wharncliffe Side and Brightholmlee, where ageing pipes have repeatedly failed.
They added: “Alongside those operational changes, we are delivering Yorkshire's largest environmental investment programme, which will bring improvements in the long-term. We're moving at pace, with infrastructure improvements already completed at almost 300 locations in the past six months.
“Looking forward, we have plans to transform Scarborough's wastewater network and upgrade more than 450 storm overflows by 2030.
“There is much more to do, and we will be open about where we are making progress and where we are not. The test for us isn't simply how much we spend. It is whether customers and the environment see better results.”
Environment Secretary, Dame Angela Eagle, is now looking at options to take further action against failing firms, officials said.
She recognises that executives are still being rewarded in ways that skirt the rules and will look to strengthen the bonus ban rules.
She said: “Water companies have let the public down time and time again, and today’s report is further proof that root-and-branch reform cannot wait.
“I am demanding answers from the companies that are failing, and I’ll be shining a spotlight on the worst offences around the country. We are getting on with the job of building a water system that finally works for the people who pay for it.”
The three other companies that were handed a one-star rating include, Southern Water, Thames Water, and South West Water.
Yorkshire Water shared how Nicole Shaw, the companies chief executive officer, “made the decision” to not receive a bonus earlier this year.
A spokesperson said: “Nicola Shaw made the decision that it would not be appropriate to receive a bonus due to our performance in the previous financial year, which was not good enough – particularly in relation to our environmental impact.
“We are focused on improving our performance through both operational changes and significant investment in our assets, environment, processes, and people. For example, we have changed the way we tackle pollution, with a greater operational focus on preventing incidents, and we’ve completed infrastructure upgrades at almost 300 locations in the last six months.
“There is much more to do, and we will be open about where we are making progress and where we are not.”
According to the Environment Agency, there were 2,666 pollution incidents in England in 2025, with 74 classified as serious, which came as a slight improvement from record highs seen in 2024.
But regulators said too many pollution incidents and environmental permit breaches “are still occurring”, with the number of serious incidents remaining a “major concern”.
Regulators said eight of the nine water companies in England were either rated as “poor” or “requiring improvement” in 2025, with only Severn Trent, in Coventry receiving the highest rating.
Together, their environmental performance assessment ratings added up to “16 stars” out of a possible 36 – a decline from 19 the previous year and the lowest recorded since the process began.
Despite the major improvements needed for water companies across the UK, the report showed drinking water quality remains among the best in the world, with 99.97% of tests meeting the required standards.
They have reduced leakage over the long term, although the regulators said further reductions are needed, with firms facing growing pressure on water resources as climate impacts drive increasingly frequent and severe drought conditions.