Anglian Water customers asked to decide how income from their bills is spent
18:23 21 January 2013
Anglian Water has today launched its biggest-ever consultation to give customers the chance to influence future investment plans – and the price of their bills.
It goes without saying that a safe and constant supply of water is fundamental to our life, health and prosperity.
Yet we cannot take this precious resource for granted in one of the driest regions of the country where the mounting pressures include a growing population and an increasingly unpredictable climate.
The question of how to meet these challenges is being asked by Anglian Water (AW) in its biggest-ever consultation, giving its six million customers a say in how much they will be paying on their bills, and what their money will be spent on.
The seven-week process launched today, named “Discover, Discuss, Decide”, will explain the conflicting pressures and competing interests affecting water supply, and give bill-payers the chance to influence the investment priorities for 2015-2020, as well as shaping long-term plans.
Findings will also be fed into the regular five-year review by industry regulators Ofwat, which agrees financial and service packages, and sets the prices which can be charged to customers.
Those settlements will be agreed with all water companies next year, and each will need to make their case as to where investment is required – along with customers’ views on affordable ways to maintain a secure supply to home and businesses.
In the Anglian region, the choices include whether funds should be directed at increasing supply to serve a growing population, or focused on efficiency measures to reduce the overall demand.
Maintaining a consistent supply has become problematic in an area where an 18-month drought left reserves so low that a hosepipe ban was introduced last April – followed by one of the wettest years on record in 2012.
With a trend towards more severe winter rainfall and drier summers, possible long-term options could include building more storage reservoirs, laying pipelines to transfer water from wetter regions, or even the prospect of desalination plants.
But optimum value could be extracted from existing supplies if investment is targeted towards efficiency measures in homes, reducing usage through metering and reducing wastage from leaks – which already costs the company £14m every year.
All of this will need to be balanced with meeting environmental regulations, the need to protect river and wetland ecosystems from over-abstraction, and the expectations of customers to see their bills kept at an affordable level.
Peter Simpson, AW’s managing director, said: “What our customers tell us really will influence our investment plans and the size of customers’ bills over the next five years.
“We face a huge range of challenges, not just as a water company but as a region.
“We are on the frontline in the fight against climate change, with some of the driest and lowest lying parts of the UK. Our region’s population is growing fast while the amount of water available remains the same, and may even decline.
“In every area of work, be it maintaining our pipes, pumps and treatment works, protecting the environment, or making sure supply matches demand, we have to decide where priorities should lay.
“We have to balance people’s different needs and expectations while keeping bills fair and affordable.”
“I believe the way we manage our water is the key to our region’s future success in uncertain times. It fundamentally affects everyone’s lives and I would urge everyone to take part in the discussion.”
Between 2010 and 2015, AW will have invested about £2.3bn, including £1.2bn on maintaining existing assets like pipes, meters and treatment works, £267m on environmental improvements and £123m on quality enhancements for drinking water.
Of the average household bill of £1.16 per day, 5p is estimated to become profit for the company’s shareholders – a return which the firm says is necessary to continue to attract private investment for infrastructure projects.
Although the population in the Anglian region has grown by 20pc during the last 20 years, the company still supplies the same amount of water, achieved by reducing wastage from leakages and implementing efficiency measures.
AW’s media manager John Clare said: “Our achievement has been to keep that level of supply constant despite a growing population, but our challenge is to meet the growth of the future.
“There are going to be more people, but there is a finite amount of water, so we need to look at what we can do to make sure people continue to have the service they expect.
“These are big questions, and what people tell us about what our priorities should be will go towards our medium-term investment and our long-term thinking.
“There is bound to be cynicism, but we really do want to know what people think. If we get thousands of people saying the same thing, it will carry a lot of weight. We will not ignore good ideas.”
An independent oversight forum has been created to ensure Anglian Water accurately reflects the views of its customers when setting out its 2015-2020 business plan to regulators.
The Discover Discuss Decide consultation will include advisory panels whose members will represent the interests of customers, communities, the environment and the economy.
The panels are independently chaired, with each chairman sitting together on a “customer challenge forum”, which will advise industry regulators Ofwat how well AW has engaged with its bill-payers.
This is the first time such a group has been set up.
The forum is chaired by Dame Yve Buckland, also chairman of the Consumer Council for Water, who described the new group as the water company’s “independent conscience”.
She said: “We have got an oversight – we have got to stand back and reassure the regulator that the company understands what its customers want, are aware of the environmental restrictions and that the majority of customers are willing to back their plans.
“It is about making sure that not only do they consult, but that what goes forward reflects the views of the customers, the local authorities, the farmers and all those other important people who have a stake.
“It is very important because it feeds into the level of prices they can charge. We are an independent conscience to bring together key stakeholders and to make sure the company goes out there and listens to people to find out what their priorities are, and most importantly, to find out what they are willing to pay for water services.
“We hope people will be encouraged to take part. Water is just such an important area for our future and for our families and for our businesses.
“For our region, it is continuing growth and prosperity. The wider Norfolk area has struggled with drought last spring, and people want a safe, secure, steady supply of water, and they want their waste water taken away. But at the same time it has got the most fantastic wetland sites for wildlife in the country, which are an asset to the area.
“So there is a balance to be struck in meeting all those demands. The company must also be doing things as efficiently, as competitively, and with as much innovation as it can to make sure bills don’t go up unnecessarily. That is the balance we are trying to achieve.”
As well as domestic households, the consultation will also seek opinions from commercial water users.
The Federation of Small Businesses (FSB) in East Anglia has already laid out a list of its priorities, which includes increased competition, small businesses being afforded the same protection as consumers in the market and better infrastructure investment, particularly on the issue of leakage.
Norwich-based businessman Martin Lake, regional vice chairman of the FSB, said: “As businesses, we are always concerned where our money goes and what value we get for it.
“Some businesses might not need water for much more than making a tea or coffee, but for others it is a vital part of their operation.
“We need security of supply to underpin the construction industry. Some building projects have been put on hold because they cannot be assured of a water supply. I’m not saying we should build houses everywhere, but if we had more infrastructure and more capacity, then we can have more housing to share the cost.”
Essex and Suffolk Water, which provides services to thousands of homes in South Norfolk and Suffolk, is also canvassing customers’ views on priorities for future investment and pricing levels.
The company has recently completed a survey of more than 1,000 household and business customers, and plans to launch an online questionnaire in February, which will allow all customers to voice their opinions on service priorities.
The Discover, Discuss, Decide consultation runs until March 10. Anglian Water customers can take part by visiting www.discoverdiscussdecide.co.uk.