Thames Water has announced its chief executive Sarah Bentley was stepping down with immediate effect, as the UK’s largest water utility struggles to transform its record on pollution and leaks.
The abrupt exit follows criticism from regulator Ofwat over its record on sewage pollution amid increasing public anger over the sector’s environmental record. Bentley and chief financial officer Alastair Cochran forwent performance related bonuses this year.
Thames Water, which supplies about a quarter of the population in England and Wales, was in the second year of an eight-year turnround plan to replace ageing and deteriorating infrastructure, a legacy of under-investment and poor performance.
The announcement was met with alarm among the utility’s staff. Gary Carter, GMB national officer, said the resignation highlighted “what a perilous situation Thames Water is in”.
He added “shareholders desperately need to put the company first and unlock the funds [needed] to keep the infrastructure and workforce of this vital public resource from collapsing”.
Martin Young, analyst at Investec, said the CEO’s resignation at a crucial time was “suboptimal”. “The challenges facing the water industry, and certain companies within it are well known. The next regulatory period will probably see higher levels of investment across the industry, with likely bill implications,” he added.
The announcement comes as public concerns mount over the lack of investment in critical infrastructure. Costs, including interest payments, are soaring, adding to pressure on company finances just as they face demands to increase investment.
Water companies, including Thames Water, which counts the BT pension fund, the Abu Dhabi Investment Authority and the China Investment Corporation among its investors, have been criticised for high debt levels and complex ownership structures.
Bentley said in a statement that “the foundations of the turnround that we have laid position the company for future success”, although when she declined her bonus last month she said her turnround plan was “not yet where I want it to be” and cited “significant headwinds from extraordinary energy costs”.
Bentley, who joined Thames Water from rival Severn Trent in 2020, will be replaced on an interim basis by Cochran and strategy director Cathryn Ross until a replacement is appointed.
Thames Water said Bentley would help support the transition to a new chief executive, although it provided no explanation for her sudden departure.
Ofwat said following the change of leadership at Thames Water, it would be “seeking assurances about the company’s continued commitment and ongoing plans to improve its operational, customer and environmental performance and [its] financial resilience”.
Ian Marchant, Thames Water’s chair, thanked Bentley for “building a first-class executive team and leading the first phase of the turnround of the company”.