The Water Watchdog talks tough but it Won 't prevent executives from getting their bonuses

New rules on bonuses are "beginning to bite," said the regulator, Ofwat, as it detailed how nine water companies "will not be using customers' money" to fund a total of £6.8m of payments to executives. Really? Who is being bitten?

- Nils Pratley

Not the executives because, as Ofwat's careful phrasing indicated, they will still get their lolly. It's just that the cash and incentive shares will come from the bucket marked "shareholders' funds", or, in the case of Dwr Cymru Welsh Water, from somewhere else because the firm doesn't have shareholders.

From the point of view of the recipients of the bonuses, the watchdog's bite makes no difference. Even Thames Water, as deep in the mire as it is possible to be, somehow concluded that bonuses of £770,000 between the chief executive and finance director were in order.

It is still important to send a signal about aligning short- and long-term incentives with the interests of customers, Ofwat might argue.