The decision by United Utilities to hand more than £300m to shareholders has prompted fresh anger over water companies’ multimillion-pound payouts, at a time when the industry is under pressure to spend more on tackling leaks and stopping sewage pollution. The company, which supplies more than 3m homes and 200,000 businesses across the north-west of England, from Carlisle to Crewe, had the unenviable title of England’s most polluting water company last year, according to Environment Agency data. United Utilities’ announcement came just a day after Severn Trent, one of Britain’s biggest water companies, also raised its dividend to £261m. Together, the two FTSE 100 water companies will have paid more than £560m to their investors over the past year. It came as Welsh Water said it was sending every customer a £10 rebate, after it admitted it had failed to report accurately the amount of water lost across its network through leaks, and the amount used by each customer. The only not-for-profit water supplier in England and Wales apologised to the 1.4 million households and businesses it serves after it found more water had been lost through leaks than previously reported, while per capita consumption was lower. United Utilities said it was recommending paying investors a dividend of 30.34p a share for the year to 31 March. This takes the firm’s full-year dividend to 45.51p, a rise of 4.6%, which is in line with its policy to raise payouts in line with a measure inflation including housing costs, calculated using the rate last November. The total payout amounted to a cost of £301m to the company. This was in a year when its operations generated £788m of net cash, more than 15% lower than a year earlier, as inflation pushed its costs higher and its customers used less water than expected. United Utilities said it had had a “challenging year” which also recorded a fall in both revenue and pre-tax profit, which tumbled by over 40% to £256m. United Utilities’ dividend increase at a time of falling profits comes just a week after the water industry said it would raise customers’ bills over time to recoup some of its £10bn investment in a sewer modernisation scheme to reduce spills of sewage into England’s waterways. The decision was denounced as “madness” by Tim Farron, environmental spokesperson for the Liberal Democrats. “United Utilities are making a mockery by destroying our precious lakes and rivers with sewage, all while handing out bumper dividends,” he said. “The system is broken when their execs and shareholders are rewarded with millions of pounds for destroying the environment.” Farron called on ministers to demand answers, adding: “This £300m should have been spent on preventing sewage polluting the Lake District and region’s rivers.” Louise Beardmore, who became chief executive of United Utilities in March, said she understood concerns about storm overflows and was “committed to respond to the challenges we face”, including a £900m investment plan. She said the company had achieved a 39% reduction in reported sewage spills since 2020, but admitted it needed to “go faster and drive a step change in performance”. Beardmore added: “Despite a challenging year of cost pressures, we have delivered our best-ever performance on a range of measures that matter most to customers, including leakage, water quality and serious pollution incident.” Welsh Water told its customers that £10 would be credited to each household and business account over the coming months, costing it £14m, after its failings on assessing leaks. Pete Perry, Welsh Water’s chief executive, said: “We are very sorry and disappointed that this has happened. We’re investing an additional £54m over the next two years to identify and reduce leakage as quickly as possible and we have shared the findings of our investigations with our regulator.” Ofwat has launched an enforcement investigation into Welsh Water’s restated leakage and consumption figures over two years from 2020-22. The water regulator assesses companies annually on their performance on leaks and consumption, and has the power to penalise or reward them.