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Yorkshire Water, Annual Performance Report 2020/2021

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AnnualContents Performance Report This report is set out into colour-coded sections to help you navigate the report easily. Click on 2020/2021the section you are interested in on the contents page and it will navigate you to that section. Published July 2021 The report is structured as follows: Contents 1 2 Navigating this document Contents page Our contents page links to every section within this document. Clicking on a specific section will instantly take you to it. 1 Click on the contents button to return to the contents page. 2 The back button returns you to the last page you visited. 3 This button takes you to the previous page. 4 This button takes you to the next page. 3 4 There are also many other clickable links within this document which we’ve made easy to spot by underlining and highlighting them in blue. If you click on one of these links, but then wish to navigate back to the page you were viewing previously, simply click the ‘Back’ button at the top of the page. Reading Definitions our APR We have included definitions on the same page as the content to make it easier to understand. You can Our Annual Performance find our full regulatory glossary on our reports webpage: Report (APR) is designed to be read on screen using a PDF viewer. You An example for outcome delivery incentives is shown below: can print our APR if you prefer, but because it’s a long document you may wish to print in black and white and use the contents page to print Outcome Delivery Incentives (ODIs) the sections you wish ODIs is a collective term for the financial incentives – positive and to read. negative – that Ofwat has applied to the delivery of our five-year plan. ‘Rewards’ allow us to charge more over the next five years, while ‘Penalties’ require us to charge less. Some of these ODIs measure performance in each of the five years of our current plan, while others apply only to the whole five years. 2 Contents Welcome to our 2020/2021 Annual Performance Report This is our first Annual Performance Report for asset management period (AMP) 7 and it covers the period from April 2020 to March 2021. It tells our customers and stakeholders about the progress we are making to deliver our commitments as well as providing information on our service levels, cost information and financial performance. This Annual Performance Report provides information required by Ofwat (the Office of Water Services), the body that regulates the water sector to protect customer interests. Definition AMP An ‘Asset Management Period’ is the term given to the five-year period covered by a water company’s business plan. AMP1 refers to the first planning period after the water industry was privatised and this covers the period from 1990 to 1995. We are currently in AMP7, which covers 2020 to 2025 and we report on our performance in the financial year 2020/2021 in this APR. 3 Contents Get in touch with us We welcome your comments and feedback on our Annual Performance Report. If you have any questions, comments or would like to give us feedback on our Annual Performance Report or any of our other publications please get in touch with us using the contact details on this page. Please do not hesitate to get in touch if you would like a paper copy of this report. You can contact us in the following ways: Email us [email protected] Sending comments via our website link Facebook message us Or posting them to us Regulation Department, Livingstone House, Chadwick Street, Leeds, LS10 1LJ 4 Contents Contents We’ve created colour-coded sections to help you to navigate this report easily. Just click on the section you are interested in on the contents page, and it will navigate you to that section. The report is structured as follows: 1 Introduction 09 This section includes a foreword and links to useful publications and websites and an introduction to what we do here at Yorkshire Water. 2 Statements from our Board 21 In this section you can find a Board statement on accuracy and completeness of data and information and the Board statement on our company direction and performance. 3 How we’re progressing with our 33 performance commitments In this section, we explain what our performance commitments are, how we are performing against them and a summary of the assurance activities we have completed for the information in this report, and the steps we are taking to improve trust in our information. 4 Pro forma tables 141 This section includes the information that we must report to our economic regulator, Ofwat. Information is shown in tables with supporting commentary. This section includes a statement from our financial auditor, Deloitte and our technical auditor, Atkins. 5 Meeting our licence conditions 315 In this section we confirm our compliance with the licence conditions relevant for the annual performance report such as the ring-fencing certificate. 5 Contents 6 Board, leadership, transparency 321 and governance In this section we include information on our company structure and how we are governed. We also include disclosures such as the statement on executive pay and performance. 7 Transactions with associates 372 and the non-appointed business In this section we disclose all the transactions between us and our associated companies. 6 Contents Finding important information in our annual performance report This report is quite long. We pack this report with useful and important information. So, to help you find what you’re looking for, we created a list of the highlights from each section. 1. Introduction Foreword Supporting publications Supporting websites About us 2. Statements from our board Board statement on accuracy Board statement on company and completeness of data and direction and performance information 3. How we’re progressing with our performance commitments Our assurance process Outperformance and underperformance Our assurance plan for the annual performance report How do we calculate the outcome delivery incentives? Targeted assurance findings How did we perform against our Our data improvement plans performance commitments? Introduction to our performance commitments 7 Contents 4. Pro forma tables Financial auditor’s opinion An accounting policy note for price control units Statement as to disclosure of information to auditors Note on revenue recognition Statement on differences Note on capitalisation policy between statutory and Note on bad debt policy regulatory accounting guidelines (RAG) definitions Technical assurance statement Tax strategy for the Statement on innovation appointed business competition 5. Meeting our licence conditions Statement on sufficiency of financial resources and facilities 6. Board, leadership, transparency and governance Our company structure Statement on executive pay and performance Our Board of Directors Statement on dividend policy for the appointed business 7. Transactions with associates and the non-appointed business Loans by or to the appointee Transfer of any corporation tax group losses by or to Dividends paid to any the appointee associated company Supply of any service by or Guarantees or other forms of to the appointee security by the appointee Transfer of any asset or liability by or to the appointee 8 Contents 1. Introduction Foreword 10 Supporting publications 12 Supporting websites 14 About us 15 9 Contents Foreword Welcome to our 2020/2021 Annual Performance Report This is our sixth Annual Performance Report and it covers the period from April 2020 to March 2021. This is the first Annual Performance Report for COVID -19 Asset Management Period (AMP) 7. It tells our customers and stakeholders about the progress Our response to COVID-19 was driven by two we are making to deliver our commitments simple priorities: protecting our customers and as well as providing information on our protecting our colleagues. Our core service service levels, cost information and financial delivery was quickly adapted, with visits into performance. This Annual Performance Report customer properties suspended for all but the provides information required by Ofwat (the most urgent reasons. The introduction of new Office of Water Services), the body that regulates safe working practices meant that we were able the water sector to protect customer interests. to maintain all essential work on our networks, to keep water flowing and toilets flushing at In April 2020 we started AMP7 - this is our all times. business plan for the period 2020-2025. Our AMP7 plan sets out how we will maintain Our financial support to customers facing and improve water and wastewater services difficulty with their bills was promoted widely, in Yorkshire to make sure they are resilient and we offered flexible payment terms and and sustainable. delayed payments where necessary. Interruptions to supply have a bigger impact on people whose A new AMP means that there are lots of lifestyles are impacted by lockdown, and we’ve changes. Our performance commitments received more customer contact during incidents are ways in which we measure and report our for understandable reasons. performance. For AMP7, we have 44 performance commitments, which is 18 more than the previous AMP. In this report you will be able to see how we are doing in terms of delivering on our performance commitments. Though there is always more to do and areas where we need to improve we are proud of our progress in year one of AMP7, especially when we think about the impact that COVID-19 has had on us all. 10 Contents Redetermination of Re-thinking our purpose, the PR19 settlement how we deliver public value and our future strategy In February 2020, we took the decision not to accept Ofwat’s Final Determination (FD) in the The experience of the last year, and our PR19 (our Price Review submission to Ofwat for continued development of regional collaborative the 2020-2025 period) process and to ask the arrangements, has made it timely to re-think our economic regulator to refer the matter to the purpose and how we deliver public value over CMA for a redetermination.
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