Bristol Water Challenge Panel Annual Report 2019/20 2 Contents
Foreword 04
Executive Summary 06
Introduction 08
Challenge Panel Activities 09 Members Meetings Challenges
Challenge Panel Findings 14 Information Assurance Key points arising from of Bristol Water performance during 2019-20 targets met or exceeded in 2019-20 targets missed in 2019-20 Customer Engagement Bespoke Customer Engagement social Contract Areas of Focus during 2019-20
Focus for 2020-21 30
Conclusions 32
Appendices 33 Appendix 1: Members Appendix 2: Bristol Water Performance Commitment Results Appendix 3: Terms of reference for BWCP during AMP7 Appendix 4: Glossary
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Foreword
Welcome to the fifth annual report of the Bristol Water Challenge Panel. This report is the culmination of work on the 2020 - 2025 Business Plan and the last of the reviews on the performance of Bristol Water during the current business planning period.
Peaches Golding OBE CstJ Independent Chair Bristol Water Challenge Panel October 2020
The report covers the two key The Challenge Panel seeks to On behalf of the Challenge Panel, functions of the Challenge Panel, help Bristol Water become the I wish to thank my colleagues that is to assure the water regulator best possible company in the UK for so generously giving their Ofwat that the views, preferences by listening to its customers and time and know how to carry and priorities of customers of Bristol by producing a demanding and out our important function of Water are clear and visible in the ambitious business plan for the scrutinising the performance new business plan and that the upcoming five-year period. By and business planning of Bristol performance of the water company definition the customers of Bristol Water. In particular, the support meets the promises that it made in Water differ in their priorities and of my Deputy Chairman Anthony its current plan. views. Reflecting the broad range Denham and Report Writer Jeremy of customer needs in one business Hawkins throughout the last five It is important to emphasise plan can be challenging. The years has been indispensable. I that the Challenge Panel and all Challenge Panel has scrutinised also thank the Board and Executive its members are independent the way Bristol Water assessed the of both Bristol Water and Ofwat from both Bristol Water and balances and tensions that arose for their openness, transparency, Ofwat although we rely on both from conflicting customer views and and confidence in the work of the organisations in order to carry out how the company translated this Challenge Panel. I am grateful to our functions. We are customers insight into the performance targets Bristol Water, in particular, which of Bristol Water and our authority set out in its business plan. hosted the Challenge Panel and comes from water regulation in its sub-group meetings while also England and Wales. We scrutinise The focus of this final year of the enabling one-to-one meetings the work of Bristol Water on behalf current business plan covers the between me and the Chief of customers and we ensure that period following the responses Executive of the company to take customer research conducted by by the Challenge Panel and place as the Board made its many Bristol Water is sufficient, robust Bristol Water to Ofwat’s Draft business planning decisions. and clear for the purposes of Determination, considerations business planning and customer after the receipt of the Final satisfaction. The latter is based on Determination and the Panel’s customer service, how Bristol Water participation in the resulting treats customers that contact it, Competition and Markets Authority the way it addresses issues such hearing. It also examines how as affordability and its treatment Bristol Water has faced the of customers in vulnerable challenges provided by the global circumstances. Coronavirus pandemic as well as its performance during 2019/20.
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“We are customers of Bristol Water and our authority comes from water regulation in England and Wales.”
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EXECUTIVE SUMMARY
Bristol Water, a water only company regulated by Ofwat, operates a five-year business planning cycle along with the rest of the water industry in England and Wales. Starting with extensive customer research, the Bristol Water Challenge Panel has scrutinised and reviewed the quality and robustness of Bristol Water’s customer engagement work to ensure that the views, priorities and preferences of customers are evident in the next ambitious five year business plan.
The intensity of the work for the incorporated the needs of customers work of the Challenge Panel or the Bristol Water Challenge Panel and had addressed their concerns interpretation of customer priorities increased significantly during the ranging from the cost of the water and preferences, the assessment period between May 2019 to April bill, to investments in assets and the of the Final Determination by 2020. The Challenge Panel verified ability of the business to financially the Bristol Water Board was that a balanced assessment of the and operationally execute its that it would make the business priorities and preferences expressed proposed plan. While the Challenge unfinanceable. by customers were reflected both in Panel’s report was written to Ofwat, Bristol Water’s new business plan the Chair also presented it to the During this final year of the current and in Ofwat’s responses to it. Bristol Water Board and challenged five-year plan, the Challenge them to meet certain customer Panel not only scrutinised work The work was detailed and expectations. towards the Final Determination complex. It built upon the customer and the company’s performance engagement work of the previous Ofwat then produced its Draft against its current regulatory four years and required the writing Determination in July 2019 commitments set at PR14 for 2015- and publication of responses to which included the performance 20, it also had oversight of a range Ofwat at two important stages in commitments and delivery of other important issues. Like the business planning process. incentives for Bristol Water for most effective businesses, Bristol 2020 to 2025. The Challenge Panel Water continued its programme For ease of understanding, the scrutinised the Draft Determination of customer research, investment first business plan submission by to ensure that customers would be in key assets such as water mains Bristol Water was in September neither at a financial disadvantage and water meters, began work on 2018. This initial business plan nor forced to pay higher bills than the implementation of its strategies reflected the views of customers up is fair and that the company would to address water poverty and the to that point and also contained the be investing at the appropriate inability of some customers to pay requirements of the water quality level to provide the service level its their bills, and undertook other environmental regulators, the customers expect. These complex activities that ensured the business Drinking Water Inspectorate, the judgments had to be supported by would be able to implement its new Environment Agency and Natural customer research. business plan. England. Finally, Ofwat issued its Final The Challenge Panel also Ofwat responded with its Initial Determination in December 2019. advised and commented on the Assessment of the Plan (IAP) in The Final Determination set out development of Bristol Water’s March 2019. Bristol Water then the view from Ofwat of what the innovative and industry leading reviewed the demands made on the Board of Directors for Bristol Water Social Contract. company by Ofwat and submitted must achieve for its customers, its an updated plan, and the Challenge shareholders and the environment. Panel independently submitted a At this point, Bristol Water may response to Ofwat. The Challenge or may not accept the Final Panel’s response assessed how Determination. Although Ofwat accurately Bristol Water had was not in disagreement with the
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“ The intensity of the work for the Challenge Panel increased significantly between May 2019 to April 2020”
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Introduction
Water is an essential resource for life; without water there is no life. The provision of fresh, potable, drinking water from our taps is the result of a complex process from water capture, storage and treatment to distribution pipes and networks and their maintenance and repair. There are times during this process that customers need to interact with the company, possibly regarding their bills, a burst or the provision of a water meter.
In previous years, the Challenge Panel scrutinised the market research programme that Bristol Water used to understand better its diverse customer base, whether rural or urban, living in family units or as singletons, property owners or renters, young or old. Naturally, the views obtained are rarely universal and understanding the differences in views and the impact it may have given the individual’s lifestyle are incredibly important. Investment and whether it should be paid from current water bills or paid off years into the future is an important issue and to reach to a decision that satisfies the greatest part of the community served by Bristol Water is complex.
This report of the Challenge Panel sets out its work during a year when the production of the company’s 2020 – 2025 Business Plan involved the Challenge Panel in two major reports to customers, Bristol Water and the water regulator Ofwat. It also includes the Panel’s scrutiny of how well Bristol Water performed during 2019/20, the last year of the current business plan.
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CHALLENGE PANEL ACTIVITIES
Members
The Challenge Panel is composed of an independent Chair, Deputy Chair and Report Writer, together with the Consumer Council for Water, environmental regulators, local councillors and individuals drawn from several backgrounds, as shown in the diagram below.
The environment and nature
Education Regulators
Health Regional and local government
Farmers Others
Stakeholder Commerce and Customer industry Panel Service
Since our last annual report our membership has changed slightly; the same organisations remain represented but due to career progression and the local elections in May 2019 some individuals have changed. A full listing of the Challenge Panel members who have contributed to the work of the Challenge Panel during 2019-20 is given in Appendix 1. The Challenge Panel continually seeks to increase our membership in areas where our skill base is reduced; to assist this it will be carrying out a Skills Audit in 2021.
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ACTIVITIES continued
Meetings
The Challenge Panel has reviewed and challenged Bristol Water policies on customer engagement and information assurance during the year. The Challenge Panel has also received presentations from Bristol Water on its performance against its PR14 regulatory commitments during the year and has challenged the company on this. The Challenge Panel’s review of Bristol Water’s performance in 2019/20 is presented later in this report. The Challenge Panel’s meetings held during 2019/20 are shown in the table below along with the topics covered in each meeting:
Meeting Date Main areas for discussion Actions
Customer Engagement 22 May 2019 • Vulnerability Strategy 17 Sub Group • Social tariff take-up Meeting 15 • Digital Accessibility Review • Customer insight and engagement • Annual survey results • Retailer engagement • Online panel • SIM results • C-Mex preparations
Challenge Panel 13 June 2019 • CESG update 17 Meeting 18 • PR19 verbal update • 2018/19 Performance • Social Contract • BWCP upcoming meetings
Customer Engagement 31 July 2019 • PR19 Draft Determination update 9 Sub Group • Quarterly insight update Meeting 16 • Next three months research
Social Contract 31 July 2019 • Aims of Social Contract 27 Sub Group • Roles and responsibilities Meeting 1 • Timetable • Benefits and measurement • Stakeholder survey • Outperformance sharing Mechanism Detail • Citizens for the Future Event
Challenge Panel 22 August 2019 • PR19 Draft Determination response overview 9 Meeting 19 • CESG and Social contract update • Vulnerability Action Plan and Social tariff research
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ACTIVITIES continued
Customer Engagement 5 November 2019 • Metering messaging research 10 Sub Group • Beat the Bill research Meeting 17 • Network Focus Groups • PR19 Draft Determination Research • Website analytics • C-Mex and D-Mex • Vulnerability Action Plan
Social Contract 21 November • Mid-year progress review 14 Sub Group 2019 • Framework development update Meeting 2 • Mapping to One City Plan and SDGs • Emerging programme for 2020/21 • Forward programme and next steps
Challenge Panel 27 November • CESG and Social Contract update 3 Meeting 20 2019 • Mid-year performance update • Mid-year assurance • Strengths and weakness statement • Update on charges 2020/21
Chair, Deputy and 31 January 2020 • PR19 Final Determination Overview 0 Report Writer
Customer Engagement 5 February 2020 • Market Engagement Day 15 Sub Group • C-Mex/D Mex Meeting 18 • ICS benchmarking • Customer Forum • CCW Research Conference • Youth Board • Stakeholder survey • Vulnerability Action Plan
Social Contract 5 February 2020 • Purpose of the Social Contract 5 Sub Group • Programme development update Meeting 3 • Employee Forum Results • Customer Forum Results • Prioritisation decision making process and criteria • 2020/21 long list of Social Contract Programme Options
Challenge Panel 25 March 2020 • CMA Referral 15 Meeting 21 • Covid-19 update • Board Leadership and transparency update • Social Contract update • BWCP logo, updated ToR and 2020/21 meeting plans • Environmental Performance Assessment consultation
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ACTIVITIES continued
The table shows the large spread of Plan culminating in reporting its Challenge Panel members have topics the Challenge Panel members findings and opinions to Ofwat on contributed to its subgroup on have been involved with in 2019/20. the company’s Business Plan in Customer Engagement, as well as a Also shown is the number of actions September 2018. The Challenge new series of meetings introduced raised during each meeting. Panel also reviewed and reported on during the year on Bristol Water’s Ofwat’s Initial Assessment of the Plan Social Contract. After the Business Plan submission (IAP) and the company’s response to in September 2018 the Challenge this assessment in March 2019. The Chair has attended seminars and Panel reviewed the challenge logging workshops organised by Ofwat and process and decided to change to This intense workload period was others on diverse topics to do with a two-tier system. This resulted followed, during 2019/20, by the PR19. The Chair has also attended in a large increase in the number review and challenge of Bristol selected Bristol Water Board of short-term actions which were Water’s response to Ofwat’s Draft meetings to keep them appraised quickly cleared to the satisfaction of Determination, particularly the of the Challenge Panel’s view of the all, but a reduction in the number of customer engagement required to PR19 Business Plan. Challenge Panel substantive challenges, which was to support the response. members have been kept informed of be expected during this relatively low the topics discussed and any activity period. Ofwat’s Final Determination was resulting output. published in December 2019. For The Challenge Panel is grateful to reasons outside the remit of the Bristol Water for organising and Challenge Panel the company did hosting all the meetings listed above. not accept this result and requested Ofwat to refer the Final Determination From 2016/17 the Challenge Panel to the Competition and Markets became progressively involved Authority. The CMA referral process in the review and challenge of remains ongoing at the time of Bristol Water’s PR19 Business publication of this report.
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ACTIVITIES continued
Challenges
The number of challenges raised in 2019/20 continued the downward trend of 2018/19 due to the completion of the PR19 Business Plan Review in 2018. Also there was little new customer research carried out or reported by Bristol Water in 2019/20 as the emphasis was on responding to the Ofwat comments on the previously submitted Business Plan and the subsequent modifications to it whilst maintaining a bill profile to suit customer priorities.
Challenges Raised Each Year
6 2019/20 9 8
10 2018/19 13 No action 36 Changes made No changes 1 2017/18 66 required 149 To be cleared
0 2016/17 85 253
1 2015/16 30 0
0 50 100 150 200 250 300
Eight challenges arose from the Challenge Panel’s main meetings and 15 from the Customer Engagement sub group. There were three main challenges areas raised in 2019/20, these were adjustments to the Bristol Water Business Plan, the customer engagement carried out and the content of the company’s new Vulnerability Action Plan. The number of challenges being raised reduced during 2019/20 is shown in the Challenge Summary for 2019/20.
Challenge Summary 2019/20
700 650 600 550 500 165 165 165 165 170 171 171 171 171 171 171 171 450 Changes made 400 No changes 350 required 300 468 468 468 468 468 469 469 478 478 478 478 478 250 To be cleared 200 150 100
50 2 10 10 10 15 18 18 9 9 9 9 9 0 July May June April March August January O ctober February December N ovember S eptember
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CHALLENGE PANEL FINDINGS
Information assurance
Throughout AMP6 the Challenge Panel has placed great importance on the need for Bristol Water to provide its customers with clear, high quality information on its service performance, on billing matters, operational issues and on engagement on its future plans. Customers’ trust in the company is heavily dependent upon sound information.
In accordance with Ofwat’s As mentioned last year, Bristol Atkins and the performance data requirements Bristol Water has Water was notified by Ofwat in and assurance results have been analysed the risks, strengths 2018/19 that, under the regulator’s shared with the Challenge Panel. and weaknesses of its reported Company Monitoring Framework, Material aspects of its reporting performance information and the company’s information systems and processes for PR19 updated and published its reporting and governance regime have received ‘green’ assurance Assurance Plan during the year. for 2018 was now ‘Targeted’ rather assessments from Atkins. than ‘Prescribed’. As in previous years the company The Challenge Panel is pleased to invited scrutiny and challenge Although the Panel notes that the see that the company has prepared from the Challenge Panel on its Company Monitoring Framework well for full reporting of its new risk assessments and on its pre- assessments will no longer be Performance Commitments from publication, the draft Assurance published, it considers both Atkins’ April 2020. Plan. The Challenge Panel sought findings in 2019/20 and Ofwat’s and received assurance from the ‘Targeted’ assessment from last company at the end of 2019 that year are significant achievements any new or emerging information- by Bristol Water and reflect the related risks were included in the success of the transformation Assurance Plan and that they the company has gone through would be dealt with by the end of to improve its operations and the 2019/20. It took particular interest delivery of services to its customers in any data provided to Bristol and its stakeholders. Water by third parties and ensuring the assurance regime covered data The Challenge Panel continues back to source. to encourage the company to maintain its strong information The Challenge Panel was pleased reporting and governance to see that the risk of reporting processes in order to be able poor information continued to to accommodate any future reduce during 2019/20. The regulatory or other external company has informed the requirements and to consistently Challenge Panel that all the report accurate and reliable reporting methodologies and data information. associated with its PR14 (AMP6) Performance Commitments had Bristol Water has also collected been assigned a ‘green’ assurance and reported internally information assessment for 2019/20 by its on some of its PR19 Performance Technical Auditor, Atkins. The Commitments. This ‘shadow’ company has also confirmed to the reporting activity has also been Challenge Panel that the assurance subject to risk assessment by regime includes source data. the company and assurance by
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" The Challenge Panel continues to encourage the company to maintain its strong information reporting and governance processes."
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FINDINGS continued
Key points arising from Bristol Water performance during 2019/20
This section identifies the key points and challenges arising from Bristol Water performance during 2019/20. The content is split into two parts; the first identifies the fourteen Performance Commitments where the company has achieved the target and highlights where performance was maintained or improved from the year before: and the second identifies the seven Performance Commitments where Bristol Water has not achieved its target for the period.
In all cases Atkins has confirmed that both the company’s reporting methodology and the resulting data for all the measures are sufficiently robust to enable the Challenge Panel to rely upon the published results. An overview of all Performance Commitments is included in Appendix 2 and the detailed review, including the definition of each Performance Commitment, can be found on the Challenge Panel’s web page.
Targets met or exceeded company outperformed the target of mains replacement and relining in 2019/20 12.2 minutes per property per year, programmes will have also helped. the first time this has happened since This section describes the fourteen 2016/17. Performance against this measure Performance Commitment targets can be significantly impacted by achieved by Bristol Water during Despite outperforming the target large unplanned supply interruptions. 2019/20 and where performance was there was no financial reward earned There were no such large incidents in the same or improved from the year for 2019/20 as the result fell in the 2019/20. before. incentive deadband.
The incentive associated with this A2: Asset reliability – infrastructure A1: Unplanned customer minutes lost commitment is financial (reward (bursts/low pressure) and penalty). The company’s performance against this measure Unit Mins/prop/yr Unit Assessment over the five years of AMP6 means Actual 15/16 15.5 it has incurred a total penalty of Actual 15/16 Stable Actual 16/17 13.1 £2.217m. Actual 16/17 Stable
Actual 17/18 73.7 Actual 17/18 Marginal The Challenge Panel welcomes the Actual 18/19 14.7 improvement in performance against Actual 18/19 Marginal Target 19/20 12.2 this measure in recent years. It is Target 19/20 Stable pleased to see that company’s new Actual 19/20 11.1 network strategy involving leadership Actual 19/20 Stable changes, a new asset management Bristol Water achieved a function, a restructuring of The reliability of the company’s performance of 11.1 minutes per its outsourced contractual infrastructure assets in 2019/20 was property in 2019/20. This level arrangements and process and assessed to be ‘stable’, achieving of performance was better than procedural improvements including the target for the year. This was the 14.7 minutes per property per a new work scheduling system and an improvement on the ‘marginal’ year achieved in the previous year a cultural shift towards minimising assessments achieved in 2017/18 and and continued the improvement in disruption to customers have 2018/19, and the consequential failure performance seen since 2017/18. Its improved the response to supply to meet the targets in those years. achievement in 2019/20 meant the interruptions. The company’s ongoing
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FINDINGS continued
The incentive associated with this 2019/20, or in the other years of C2: Hosepipe ban frequency commitment is financial (penalty only). AMP6, because all targets have Bristol Water’s performance against been met. Unit Days/year this measure over the five years of AMP6 means it has incurred a total Actual 15/16 1.5 penalty of £685,000. B1: Population in centres >25,000 at Actual 16/17 3.1 risk of asset failure Actual 17/18 3.1 Performance in 2017/18 against the low-pressure component of this Actual 18/19 3.1 Unit Pop at risk commitment was better than the Target 19/20 10.2 previous year. The number of mains Actual 15/16 288,589 Actual 19/20 3.1 bursts in the year was 796, over 25% Actual 16/17 288,589 lower than in 2018/19. The company Actual 17/18 9,063 informed the Challenge Panel that the The reported return period for weather conditions during 2019/20 Actual 18/19 9,063 2019/20 was 3.1 days per year, the same as in the previous three years. were more favourable than the year Target 19/20 9,063 before and this will have helped to The target for 2019/20 was 10.2 reduce the number of bursts. Actual 19/20 9,063 days per year so the company’s performance remains within this. The company’s performance in 2019/20 A3: Asset reliability – non- was in line with the target because The incentive is financial penalty infrastructure of the completion of the Southern only. No penalty was applied in Resilience Scheme in 2017/18. 2019/20, or in the other years of AMP6, because all targets have Unit % The incentive associated with this been met. Actual 15/16 Stable commitment is financial (reward and penalty). No reward or penalty was Actual 16/17 Stable applied in 2019/20, or in the other years E1: Negative water contacts Actual 17/18 Stable of AMP6, because all targets have been met. Actual 18/19 Stable Unit contacts/year
Target 19/20 Stable Actual 2015 2,329
Actual 19/20 Stable C1: Security of Supply Index Actual 2016 2,162
Actual 2017 1,711 The reliability of the company’s non- Unit Index infrastructure assets in 2019/20 Actual 2018 1,934 Actual 15/16 100 was assessed to be ‘stable’ in line Target 2019 2,221 with the target for the year. This Actual 16/17 100 Actual 2019 1,712 assessment has been achieved Actual 17/18 100 each year since 2015/16. Actual 18/19 100 The Challenge Panel notes that Bristol Water’s performance against this There were no issues with turbidity Target 19/20 100 measure in 2019 was significantly in 2019/20, as has been the case Actual 19/20 100 better than target. The number of over the last five years. negative water contacts decreased The company’s performance in by 222 (11%) over 2018 and The Challenge Panel notes however 2019/20 was 100% and in line with returned to the level reported in 2017. that the number of unplanned non- the target. Performance since the start of AMP6 infrastructure asset maintenance has improved by some 26%. The events in 2019/20 was some 14% Challenge Panel has encouraged the higher than the previous year. company to do all it could to minimise such contacts and so welcomes The incentive associated with this this outcome. commitment is financial (penalty only). No penalty was applied in
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FINDINGS continued
The incentive is financial (reward activities. The Challenge Panel is H2: Raw water quality of sources and penalty). No reward was pleased to see that the company’s applied in 2019, or in the other years efforts in assigning more effort and Unit % of AMP5 baseline of AMP6, because performance resources to reducing leakage have aggregate of algal bloom frequency has always been with in the been successful over the last two incentive deadband. years, particularly as leakage had Actual 15/16 +20% Deteriorating increased between 2016/17 Actual 16/17 +11% Deteriorating and 2017/18. -1% Marginal F1: Leakage Actual 17/18 Actual 18/19 -14% Improving H1: Total carbon emissions Unit Ml/day Target 19/20 +/-<10% for >2years Stable Actual 15/16 44.2 -25% Improving Unit kgCO2e/person Actual 19/20 Actual 16/17 47.4 Actual 15/16 35 Actual 17/18 49.6 The company agreed with Actual 16/17 32 Actual 18/19 45.8 Ofwat a change to reporting this Actual 17/18 28 metric, therefore the targets are Target 19/20 43.0 Actual 18/19 23 presented as a % change of the Actual 19/20 40.9 AMP5 baseline aggregate (8,059) Target 19/20 20 of algal bloom frequency. The The reported leakage for Actual 19/20 19 previous measure was based 2018/19 was 40.9 Ml/d, and so on a categorisation as either outperformed the target of 43.0 Bristol Water reduced its carbon deteriorating, marginal, stable or Ml/d. The latest performance emissions from 23.0 to 19.0 improving, which the table above represents a significant reduction kgCO2e per person from last year shows for comparison. in reported leakage since the high (a reduction of around 17%) but point of 49.6 Ml/d in 2017/18. outperformed the 2019/20 target The quality of the company’s raw of 20 kgCO2e per person as a water sources in 2019/20 was The incentive is financial (reward result. This was the first time in assessed to be ‘improving’ in line and penalty) and is based on AMP6 that the target was met. with expectation. This continued average figures for the five years the improvement on the positions of the AMP period. The company is The company informed the reported in 2015/16, 2016/17 assuming the incentives associated Challenge Panel throughout AMP6 and 2017/18. with its leakage performance will that the use of some standard be calculated with reference to industry definitions when the While the Challenge Panel the original Final Determination targets were set were proving to welcomes the improving position leakage targets. The associated be too aggressive and could not on raw water quality it wishes financial reward earned for be met in a cost-effective manner. to better understand how 2019/20 is £1.984m based on However, the company made performance of this indicator is these targets. Over the AMP6 good progress during the last two measured and monitored in AMP7, period as a whole the company years in implementing a number particularly as the definition of the has incurred a net penalty of projects to offset the import metric is changing. It will be seeking of £0.902m. of energy from grid and lower clarity on company’s use of hard overall energy consumption. The interventions and the promotion of A year ago Bristol Water informed Challenge Panel welcomed this. behavioural change by stakeholders the Challenge Panel that it was (eg farmers) and wishes to review confident of out-performing its source data and raw water quality leakage target for 2019/20 as sample analysis to see evidence of it had reviewed and increased their impact. It will also explore the productivity, eliminated the relationship between the company’s backlog of leakage work and statutory environmental obligations increased in-house staff numbers and any additional environmental assigned to leakage reduction improvement work associated with
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FINDINGS continued
its Social Contract. The company I1: Percentage of customers in after the General Election in 2019 has agreed to engage with the water poverty and the lack of fines imposed on Panel on these issues during the other water companies for poor coming year. performance may have had a Unit % beneficial impact as it appears that Actual 15/16 0.4 the perception of increased value for H3: Biodiversity Index Actual 16/17 0.9 money is being replicated across the industry. Actual 17/18 0.0 Unit Index score Actual 18/19 0.0 The Challenge Panel notes that value Actual 15/16 17,649 Improving Target 19/20 1.8 for money will also be a Performance Actual 16/17 17,650 Improving Commitment in the next AMP period Actual 19/20 0.0 and so welcomes the company’s Actual 17/18 17,657 Improving improved performance against this Actual 18/19 17,668 Improving The reported percentage of indicator in 2019/20. customers in water poverty in Target 19/20 17,653 Improving 2019/20 was 0%, the same as 17,670 Improving Actual 19/20 reported each year since 2017/18. L1: Negative billing contacts The target percentage for 2019/20 The company agreed with Ofwat was 1.8% so the Challenge Panel a change to reporting this metric, was pleased to see performance Unit contacts/year therefore the targets are presented was well within this and maintains Actual 15/16 2,301 as a numerical BI index score. the excellent performance in recent Actual 16/17 3,096 The previous measure was based years. The performance target has on a categorisation as either been met in each year of AMP6. Actual 17/18 2,300 deteriorating, marginal, stable or Actual 18/19 1,595 improving, which the table above Target 19/20 2,170 shows for comparison. J3: Value for money Actual 19/20 1,274 Bristol Water achieved an Unit % ’improving’ Biodiversity Index in Bristol Water reported 1,274 2019/20, in line with its target. The Actual 15/16 70 negative billing contacts in 2019/20, score increased from 17,657 Actual 16/17 72 some 300 fewer than in 2018/19 to 17,670. (1,595) and well below the target of Actual 17/18 69 2,170 for the year. The target was The Challenge Panel notes that the Actual 18/19 68 met in four out of the five years company’s biodiversity targets in the Target 19/20 72 of AMP6. next price control period are more stretching. The Panel welcomes this Actual 19/20 75 The Challenge Panel was pleased and wishes to better understand that performance has improved the how performance against the Bristol Water has reported a 75% markedly since the level in 2016/17 Biodiversity Index is measured and performance for this measure in and that the focus the company assured and how it translates into 2019/20 against a target of 72%. gave to customer service and the environmental improvements. It Performance improved significantly initiatives such as proactive text also wishes to review source data from 68% the year before and messaging proved to be effective. and to understand the relationship exceeded the previous high of 72% between the company’s statutory in 2016/17. The Challenge Panel was environmental obligations and pleased that the target was met any additional environmental in 2019/20 for the first time in improvement work associated with three years. its Social Contract. The company has agreed to engage with the The Challenge Panel believes the Panel on these issues during the decreased publicity around re- coming year. nationalisation of the water industry
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FINDINGS continued
Targets missed in 2019/20 G1: Meter penetration customer journey in AMP7. It has also further increased its marketing This section describes the seven activities and reinstated internal Unit % Performance Commitment targets meter fits. It now has a much stronger missed by Bristol Water during Actual 15/16 47.3 opportunity to meet the meter 2019/20. Actual 16/17 49.3 installation target. The Challenge Panel will monitor the company’s Actual 17/18 52.7 performance in the coming year. D1: Mean zonal compliance Actual 18/19 56.0 Target 19/20 65.9 G2: Per capita consumption Unit % Actual 19/20 59.0 Actual 2015 99.93 As reported in previous years Unit Litres/head/day Actual 2016 99.97 Bristol Water made a slow start Actual 15/16 141.1 Actual 2017 99.93 implementing its plan to install meters Actual 16/17 144.1 Actual 2018 99.99 on change of occupancy. Actual 17/18 144.5 Target 2019 100 The company increased its meter Actual 18/19 148.3 Actual 2019 99.97 penetration to 59.0% by the end of Target 19/20 142.0 2019/20 but fell short of its target of Bristol Water’s performance in 65.9%. It missed its targets in each Actual 19/20 144.6 2019 against this measure was year of AMP6. 99.97% against a target of 100%. The per capita consumption reported Performance last year was 99.99%. The incentive associated with this for 2019/20 was 144.6 litres per measure is financial (reward and head per day. The target for the year The incentive associated with this penalty). The associated financial was 142.0 litres per head per day so commitment is financial (penalty penalty incurred for 2019/20 is was missed. The reported figure for only). There is no financial penalty £152,000. The total penalty accrued the previous year was 148.3 litres incurred for 2019 as performance for the five years of AMP6 is £726,000. per head per day so consumption was within the penalty deadband. decreased by nearly four litres per The total penalty accrued during During 2016/17 the company head per day per (around 2.5%). AMP6 is £568,000 due to the level of developed and commenced a revised Bristol Water informed the Challenge performance achieved in 2015 metering plan and it invited comments Panel that this was probably weather and 2017. from the Challenge Panel on this. related with cooler conditions than Bristol Water’s revised plan was the year before. Performance fell slightly in 2019 as designed to meet the original meter a result of there being four failures penetration target by 2019/20 but the The Challenge Panel has been on customers’ pipework and four Challenge Panel considered this to be satisfied that the company has associated with issues on the ambitious. The company did increase made reasonable efforts to reduce company’s network (up from two last its marketing activities during 2019/20 consumption during AMP6. It notes year). Nearly 17,000 samples were including more advertising and it that consumption has been rising taken in the year. promoted its ‘Beat the Bill’ campaign generally across the industry. for a second time. The Covid-19 Influencing customer behaviour in the The Challenge Panel notes that pandemic had a minor impact on future, including water consumption, this indicator will be replaced in performance at the end of 2019/20 but forms part of the company’s customer AMP7 by a risk-based water quality without this the target would still have and community focussed Social performance measure known as the been missed. Contract. The Challenge Panel has Compliance Risk Index (CRI). welcomed this innovative approach The company has informed the and is involved in its planning and the Challenge Panel that, due to the monitoring of performance. restructuring of its operations, it will have more control over meter fit operations and the end-to-end
20 CHALLENGE PANEL
FINDINGS continued
H4: Waste disposal compliance The SIM measure will be replaced The company told the Challenge by a new common measure of Panel that its SIM proxy performance experience (C-MeX) from 2020/21 in 2019/20 had been affected Unit % onwards. To transition from SIM to by significant customer service Actual 15/16 96 C-MeX, Ofwat required companies to challenges resulting from the Actual 16/17 96 report against a SIM proxy indicator implementation of its new operating in 2019/20. The SIM proxy includes model in October 2019. This model Actual 17/18 98 a composite quantitative measure transferred the ownership of work Actual 18/19 98 relating to the number of contacts planning and scheduling activity Target 19/20 100 received excluding telephone in-house. Bristol Water believes complaints (which were included in the new model is the best for the Actual 19/20 98 SIM). It also includes a qualitative company and for customers but measure comprising one of the there were some teething issues. Bristol Water achieved 98% survey questions from C-MeX. The The speed with which issues were compliance against the 2018/19 SIM target proxy target is the same resolved dropped and this had a target of 100%, the same performance as for SIM, that is to achieve a level knock-on detrimental effect on the achieved in the previous three years. of performance ranked within the customer perception of the company. Compliance issues at Barrow and industry top five. The SIM proxy has Urgent issues were dealt with more recently new discharge consent a reputational incentive assigned to well but some routine activity was at Blagdon have been the causes it, unlike SIM which was financial. adversely affected. of failure against this indicator throughout AMP6. Thus the company’s SIM proxy score The Challenge Panel was pleased for 2019/20 is not comparable with to learn that these issues had The company has informed the its SIM performance in previous been resolved by end of 2019/20 Challenge Panel that it intends to years. and it hopes that customer service implement a remedial scheme for performance will improve in the the discharge at Blagdon in 2020/21. The Challenge Panel is disappointed coming year. Through its shadow The Challenge Panel is very keen to that the company’s SIM proxy reporting against C-MeX in 2019/20, understand the compliance issues performance of 83 in 2019/20 is the company can show that its at Blagdon, the company’s statutory likely to fall outside the industry top customer service performance is obligations the site and the opportunities five (based on provisional industry reasonably good in comparison to for improvements, their timing and data sharing and assumptions). It is others in the industry. linkage to wider customer preferences also less that the original SIM target for the environment. The company has of 88 for 2019/20 (the previous The Challenge Panel is also agreed to engage with the Panel on year’s upper quartile SIM score) encouraged that Bristol Water’s these issues during the coming year. although the actual and target customer service performance as figures are not comparable for the measured using non-regulated reasons described above. metrics such as CCW’s Water J1: Service Incentive Matters research, ICS Business Mechanism (SIM) There is no financial penalty accrued Benchmarking Surveys and the for 2019/20 because the incentive numbers of negative billing contacts Unit SIM score/ associated with the SIM proxy is and written complaints shows ranking reputational. However, under the improvement over recent years and, Actual 15/16 85.1 Top 5 PR14 incentive regime the company in the case of the ICS metric, utility will benefit from an adjustment of industry leading performance. Actual 16/17 85.9 Top 5 £84,000 due to achieving an average Actual 17/18 83.4 Outside industry SIM ranking of 8th over the Top 5 first four years of AMP6 (the industry Actual 18/19 84.7 Outside position is used to assess the level Top 5 of incentive regardless of whether a company’s annual SIM target has Target 19/20 87.8 Top 5 been met). Actual 19/20 82.5 Outside Top 5
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FINDINGS continued
J2: General satisfaction from systems and processes in recent customers’ queries were dealt with surveys years to improve customers’ effectively and resolved at the first experience through initiatives opportunity. These improvements including the improvement of involved more staff training and Unit % its digital offering and its street better IT systems and working Actual 15/16 83 working activities. It has also made methods. Therefore the Challenge Actual 16/17 86 its website more accessible to Panel is disappointed that these customers with disabilities. As such initiatives did not translate into Actual 17/18 87 it was disappointed that the level improved performance against Actual 18/19 89 of general satisfaction as measured this metric. Target 19/20 >93 by this indicator has fallen. However, as the survey associated The company has suggested Actual 19/20 87 with this indicator includes a that customers respond to this random sample of customers, survey by considering their whole Bristol Water achieved a regardless of whether they have experience of the company, rather satisfaction score of 87% in contacted the company or are than just through their telephone 2019/20, two percentage points bill payers, the Challenge Panel interactions. It has also highlighted lower than the previous year. The accepts that such investment may a general reduction in telephone 87% satisfaction achieved also not entirely influence the outcome contacts and more use of digital fell short of the 2019/20 target against this metric. contact methods. of greater than 93%. In spite of performance at the end of AMP6 The Challenge Panel is unable to being four percentage points higher K1: Ease of contact from surveys comment on these assertions but than at the start, the targets have is encouraged to see that, in the been missed in all years during ICS Business Benchmarking Survey Unit % the period. in late 2019, Bristol Water was Actual 15/16 95.0 ranked top in the utility sector for The Challenge Panel considers Actual 16/17 94.4 “makes it easy to contact the right that customers satisfaction during person to help”. 2019/20 may have been adversely Actual 17/18 93.1 affected by the significant Actual 18/19 91.4 operational changes Bristol Water Target 19/20 >96.5 implemented during the year and the associated challenges it faced Actual 19/20 91.8 during transition. The Challenge Panel was assured by the company Bristol Water achieved a slight that these issues were resolved by improvement in performance for the end of the year. this measure from the previous year. However its score of 91.8% The company has suggested fell well short of the target of the decrease in score compared greater than 96.5%. The target has to the previous year may have been missed in each year of AMP6 been caused by an increase in and performance at the end of the the number of customers who period was over three percentage responded with “don’t know” points lower than at the start. and “neither good nor poor” in the surveys. The Challenge The Challenge Panel noted last Panel continues to encourage the year that Bristol Water was striving company to investigate and reduce to improve its customer service the number of such responses by making it easier to respond wherever possible. to enquiries but that this was proving to be a challenge. The The Challenge Panel notes that company implemented further Bristol Water has invested in new improvements in 2019/20 to ensure
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Customer engagement
While undertaking the bespoke surveys mentioned below Bristol Water has also developed a number of engagement activities that are undertaken on a regular basis – some quarterly, some annually. The engagements enable Bristol Water to identify trends in customer views and also to track how changes and improvements the company makes to its services and impact on its customers.
While engaging with its customers but are always over 700 and can A summary of the data from all every day, Bristol Water has over the be up to 1,600. the regular engagement activities last few years transformed the way it described above is provided to the uses this data to ensure the company On an annual basis more formal Challenge Panel at its quarterly is capturing its customers’ views and surveys are carried out, including the Customer Engagement Sub- learning from their feedback on an ICS Benchmarking survey, the UK Group meetings. The Sub-Group on-going basis. Customer Satisfaction Index, and an is encouraged by the company to annual household customer, business challenge the methodology used A Customer Dashboard has been customer, and stakeholder survey. and the results. Future surveys are developed by the company as the also discussed, and members are primary reporting tool for customer Similar arrangements are made to encouraged to take part as their engagement data. It is designed engage with company staff, retailers, time permits. to make it easy for the business to developers, and future customers on take into account the customer voice an on-going basis. in its everyday decision making. The Dashboard is a live tool, and is referred to by Bristol Water staff regularly, and updated once a quarter. An annual overview of customer feedback across a range of service attributes is produced to review what customers are saying.
The main sources of quarterly data are the Online Customer Panel, which generates customer insights on a regular basis and allows tracking of changes over time, and the Customer Forum, which enables more in-depth discussion face-to- face with a demographically similar group. The Forum also allows Bristol Water to consult with customers who are relatively well acquainted with the company on topics that are relevant at that time. These inputs are supported by a simple quarterly online survey, with questions tied to other customer engagements in that quarter to triangulate responses; customer numbers for the survey vary
23 CHALLENGE PANEL
Bespoke customer engagement during 2019/20
During 2019/20 the Challenge Panel reviewed the quality of the bespoke customer research carried out by the company prior to and since Ofwat’s Initial Assessment of the Business Plan (IAP) and Ofwat’s Draft Determination, the interpretation of the research findings and the use of the results to support components of the company’s revised action plans in its response to the Draft Determination.
Bristol Water conducted two pieces BW performance is currently weak have reduced or lower financial of bespoke research after receiving (for example in mains repairs). incentives. the Draft Determination by using quantitative online surveys and face 392 households were surveyed, When presented with the proposals to face interviews. The company also mainly meeting the Bristol Water from Bristol Water and Ofwat for the held a meeting of its Customer Forum. customer demographics. There was ODI package, customers were equally also a good spread of customer supportive of both. There appeared The research covered Ofwat’s ODI incomes and household bills. The to be trust in both Bristol Water and interventions contained in the Draft Challenge Panel considered that the Ofwat, and hence a lack of clear steer Determination and their impact research methodology represented from customers as to which package or on bills. The online research also best practice. whose package of ODI they favoured included the company’s proposed the most. The lower bill of the Ofwat Social Tariff cross-subsidy (this was a The aspects of service for which package was noted by customers. challenge posed by Ofwat in the IAP). customers said should have the strongest incentives were The research showed customer ODI customer engagement drinking water quality, leakage, support for underperformance The Challenge Panel reviewed and environmental legal obligations, and penalties and outperformance challenged Bristol Water’s research mains repairs. Developer experience, payments. However, the incentives on the impact of the revised ODIs on meter penetration, PCC and other should be more geared towards annual bills. The Panel commented asset health measures were ranked penalties than outperformance on the online research questionnaires lower down the list and should payments. in advance of their use and the company made some changes to these as a result.
The aim of the research was to understand customers’ attitudes to incentives, particularly the use of financial incentives, as well as the overall Bristol Water ODI package in relation to Ofwat’s Draft Determination.
The Challenge Panel noted that the ODI research covered the revised range of incentives contained in the Draft Determination and the potential impact on asset failure, leakage and supply interruptions and the proposed increased penalties in areas where
24 CHALLENGE PANEL
While the proposed Bristol Water The Panel noted that some of the and made several significant package closely aligned with technical material presented to comments and recommendations customers’ views, customers said participants proved challenging which the company took on board they would accept the ODI package even to those that already had before using it. put forward by Ofwat. some experience of the company’s customer engagement surveys. The research met its target of Bristol Water Customer However, the engagement from engaging 400 households. Quotas Forum Meeting participants was high. The for age, gender, socio-economic This Customer Forum is a self- overall sentiment expressed was group and metering were set in line selected group of Bristol Water supportive of company’s original with Bristol Water’s PR19 sampling customers formerly from the ODIs and service priorities and that requirements. The Panel found the company’s online panel. It has no some of the incentives in the Draft survey sample size and demographic correlation with Bristol Water’s Determination appeared to be at spread to be reasonable. It considered base customer demographic. Forum odds with customers’ preferences, that the research methodology members can be considered as very particularly those relating to asset reflected best practice. informed and supportive group of health. customers as they meet with Bristol There was an overall acceptability Water on a quarterly basis. Social Tariff Research of Bristol Water plans to increase The aim of the research was social tariffs by 60p from £1.40 to £2, The Challenge Panel attended to understand Bristol Water’s to extend the social tariff support. the Customer Forum session. The customers’ attitudes to social tariffs in 69% of customers find the plans key findings were that customers principle, that they are an acceptable to increase the social tariff support were surprised by Ofwat’s Draft way to ensure affordable water through bill increases for other Determination and the level of bills, and finally to consider the customers acceptable. The research challenge on the plan, however they acceptability of Bristol Water’s social determined that the median value supported lower targets for mains tariff plans. of support was £2.25 and the mean bursts and per capita consumption. value was £6. Participants were supportive of The Challenge Panel reviewed and Bristol Water’s package of incentives challenged the company’s online and unsupportive of Ofwat’s. This research into its proposed Social was a slightly different from the ODI Tariff. The Panel reviewed the customer engagement result above. questionnaire used in the research
25 CHALLENGE PANEL
Social contract
On behalf of all its customers, the Panel challenged Bristol Water in 2017 to understand its role within the greater society of Bristol and to understand its responsibility to customers. The Challenge Panel was pleased when Bristol Water became the first water company to publish a Social Contract in January 2019. It also noted that Ofwat had recognised the potential scope and quality of this strategic initiative.
The Social Contract is intended to are sought, fairly represented and sought at regular intervals. inform customers and stakeholders taken into account. how the company invests in projects The Panel’s key challenges to the related to its social purpose in The Challenge Panel is aware of its company during the development various communities in the future independence and potential conflicts phase of the Social Contract covered: and how it forms partnerships with of interest during the development other bodies and institutions. It also of the Social Contract and the ■ The definition and measurement sets out how the company intends to associated stakeholder engagement. of the success of the Social be accountable for its performance Contract in delivering these projects; by The Panel established a Social ■ The proposed SC benefits committing to share further Contract Sub-Group (SCSG) in framework and the proposed use investment based on the levels of summer 2019 to undertake its of a Social Return on Investment satisfaction of its customers (via detailed work and to keep it metric the UKCSI business benchmarking informed of key developments and ■ The use of the Social Contract survey) and its stakeholders (via findings. and the achievement of the company’s Local Community success in both urban and rural Satisfaction Performance The Challenge Panel welcomed environments Commitment for 2020 to 2025). the December 2019 publication of ■ The source of innovation from the Social Contract Interim Impact within the company’s proposed SC The role of the Challenge Panel in Report and mid-year infographic organisational structure and roles the Social Contract is to: on the company website. By being and responsibilities ■ Challenge and contribute to transparent and open about the ■ Consultation with local universities the ongoing development of progress made to date, the Panel on possible customer valuation the Social Contract framework hopes that Bristol Water will be seen methodologies ahead of April 2020 and beyond as a business its customers can ■ Contact with organisations that with the objective of continuous continue to trust. have benchmarks for being a good improvement employer ■ Oversee and challenge the Throughout the initial phase of ■ The inclusion in the initial delivery of the Social Contract development, the SCSG and main engagement of a survey question programme on behalf of Panel have encouraged Bristol on the company’s future Social customers Water to place customers and Contract initiatives ■ Challenge transparency of stakeholders at the heart of its Social ■ The inclusion of local stakeholders, reporting in relation to the Social Contract decision-making. It has also including contractors and Contract encouraged the company to be as suppliers, in the Social Contract ■ Challenge the application of innovative as possible, as well as ■ The use of the Bristol One the Social Contract sharing encouraging the company to focus City Plan (OCP) to help drive mechanism the outcomes of the Social Contract achievement of the company’s ■ Challenge the risk to delivery in the areas that customers prioritise AMP7 PC targets, particularly the of the overall Social Contract the most. reduction in water consumption programme and its components ■ The measurement of change ■ Challenge and contribute to the Throughout 2019/20 the Challenge in internal culture towards the development on the 2020/21 Panel has been kept abreast of Social Contract and societal programme of Social Contract the ongoing development of the issues including the use of the activities to ensure that viewpoints programme and its views have been annual staff survey and the need
26 CHALLENGE PANEL
to establish a baseline position sought and the Challenge Panel has societal impacts. It also at the same regarding culture from which to welcomed the range of customer time ensures the voices of customers, measure change research undertaken throughout the stakeholders and employees are ■ The clear and transparent year. The Panel is content that the taken into consideration throughout reporting of SC-related decisions methods of engagement undertaken the evolution of the process. taken by the Board and the need have ensured that different customer for the Board to be clear in its groups and voices have been heard The Challenge Panel thanks the own mind about benefits and and influenced the development of company for its openness and how to measure performance and the new programme. transparency throughout 2019/20 to communicate this at all levels and for providing it with regular, internally and externally. The Challenge Panel is encouraged timely briefings and presentations ■ The avoidance of conflicts/overlap that the final Social Contract and sharing its thinking on how of the Social Contract with the programme proposed reflects a it intends to improve its Social company’s AMP7 PC and ODI balance of the interests of those Contract activities moving forward targets (eg the Biodiversity Index, consulted and reflects the priorities for customers and interested per capita consumption) and the expressed by customers. Based on stakeholders. risk of double accounting the final list of options proposed, the ■ The use of the Social Contract Panel is confident that the Social The Panel looks forward to reviewing to help establish and embed the Contract will in 2020/21 continue to the company’s Social Contract behaviours required to reduce meet its objective, namely, to act as performance in 2020/21. However, it water consumption a transparent framework in ensuring notes that progress may be affected ■ The need to understand the reach the company delivers its social by the coronavirus pandemic which of each communication channel purpose. had emerged around the start of and possible use of data analytics 2020/21 and it will be monitoring to achieve this. The Challenge Panel considers that closely how the company manages the Social Contract is not only unique the impact on the delivery of the first The views of customers and but more importantly, it ensures that year of Social Contract programme. employees have been actively board level decisions focus on wider
27 CHALLENGE PANEL
Areas of focus during 2019-20
In its Annual Report for 2018/19 the Challenge Panel identified specific aspects of Bristol Water’s performance it wished to review and challenge in more detail during 2019/20.
The following aspects of performance Performance Commitments. Particular Per Capita Consumption were identified by the Challenge Panel challenge was made to any data from Last year the Challenge Panel for particular focus in 2019/20: contractors or other third parties and requested further information on the evidence of information checking Bristol Water’s future plans to Customer complaints and document control. influence customer behaviour on Following CCW’s public challenge to water use. Bristol Water in 2018/19 to reduce The company informed the Challenge customer written complaints, the Panel in 2019/20 that all its The Challenge Panel is satisfied that company changed some working reporting methodologies and data the company has made reasonable practices and achieved a reduction associated with its PR14 Performance efforts to reduce consumption during that year, down from 31.0 written Commitments had been assigned a AMP6 and that it recognises more complaints per 10,000 households to ‘green’ assurance assessment by its has to be done to influence customer 26.2. The Challenge Panel is pleased Technical Auditor, Atkins and that the behaviour towards water use. to note that the company recorded assurance regime included source a further fall in 2019/20, down to data. The Company considers that, due Service Incentive Mechanism (SIM) 17.2 written complaints per 10,000 to its new operational delivery model, Bristol Water implemented households. third party information assurance is improvements to its customer systems not an issue. and processes last year and reported Operational incidents that its SIM proxy performance in the In recent years Bristol Water has Meter Penetration second half of that year improved experienced a number of significant Bristol Water’s original meter as a result. operational incidents caused by penetration target for 2019/20 unplanned events such as extreme was 65.9%. Last year the company The Challenge Panel is disappointed weather conditions or by burst reforecast its ability to meet this target that the company’s SIM proxy mains. These events had an adverse to 62% due to its slow start in the early performance of 83 in 2019/20 was less impact on a number of interrelated years of AMP6. that the year before despite the system performance commitments. The and process improvements made. The company kept the Challenge Panel Bristol Water increased its meter company told the Challenge Panel informed of its response to these penetration to 59.0% by the end of that its SIM proxy performance had incidents, the lessons learned from 2019/20 so missed both its original been affected by significant customer them and the steps it has taken to and revised targets. This was despite service challenges resulting from the reduce the risk of reoccurrence. an increase in its marketing activities implementation of its new operating including more advertising and model in October 2019. The Challenge There were no such incidents during the promotion of the ‘Beat the Bill’ Panel was pleased to learn that these 2019/20, partly because the weather campaign for a second time. issues had been resolved by end of was generally favourable and partly 2019/20 and it hopes that customer due to the company’s new network The company also inform the service performance will improve in the strategy, operational process and Challenge Panel that its performance coming year. procedural improvements and a against this metric was impacted cultural shift towards minimising by waning customer demand and a Through its shadow reporting against disruption to customers. The slowing housing market, which are not C-MeX (the successor metric to SIM) company’s ongoing mains replacement directly within its control. in 2019/20, the company has been and relining programmes also helped. able to show that its customer service The Covid-19 pandemic had a minor performance is reasonably good in Operational data impact on performance at the end of comparison to others in the industry. The Challenge Panel continued its 2019/20 but, without this, the target review and challenge of the quality would still have been missed. of operational data used in the reporting of the company’s PR14
28 CHALLENGE PANEL
General Satisfaction from Surveys Bristol Water was ranked top in the references to the company’s social Last year the Challenge Panel noted utility sector for “makes it easy to purpose and the delivery of its that customer’s main reasons for contact the right person to help”. corporate responsibilities and balance dissatisfaction included poor quality to dividends dividend policy. The work, poor response to problems and Negative Water Contacts Statement can be found at https:// poor ground repairs after competing The Challenge Panel was disappointed www.bristolwater.co.uk/wp-content/ work. However, it was encouraged to see that the reducing trend of such uploads/2020/07/BRL-Trust-Beyond- that the company was seeking to contacts was reversed last year. Water-2019-20.pdf. This statement improve its customers’ experience Performance had been impacted by is intended to satisfy Ofwat’s through initiatives including the the company’s leakage activities. Board Leadership, Transparency & improvement of its digital offering and Governance principles. These aspects its street working activities. In 2019/20 The Challenge Panel was pleased to also feature in the company’s Annual the company also made its website see that Bristol Water’s performance Performance Report which contains more accessible to customers against this measure in 2019 was a section covering dividends and with disabilities. significantly better than target. The performance in more detail. number of negative water contacts 2. The Bristol Water Board Corporate Therefore, the Challenge Panel decreased by 222 (11%) over 2018 Governance Code from July 2019 was disappointed that the level of and returned to the level reported in at https://www.bristolwater.co.uk/ general satisfaction fell from last year. 2017. Performance since the start of wp-content/uploads/2019/07/Bristol- However, as the survey associated AMP6 has improved by some 26%. Water-Corporate-Governance- with this indicator includes a random Statement-July-2019.pdf sample of customers, regardless Raw Water Quality of Sources 3. The company’s Social Contract of whether they have contacted Last year the Challenge Panel guide at https://www.bristolwater. the company or are bill payers, the said it wished to understand how co.uk/wp-content/uploads/2020/05/A- Challenge Panel accepts that such performance of this initiative is Guide-to-Our-Social-Contract.pdf and investment in systems may not measured and monitored as it was forward programme entirely influence the outcome against not confident there is correlation of this metric. information provision to farmers and improved raw water quality. Ease of Contact from Surveys The Challenge Panel recognises that The Challenge Panel welcomes the Bristol Water strives to improve its improved position on raw water customer service by making it easier to quality during AMP6. The definition respond to enquiries. of the metric changes in AMP7 and the Challenge Panel will continue to The company implemented further monitor the company’s performance improvements in 2019/20 to ensure and still wishes to better understand customers’ queries were dealt with how performance on raw water quality effectively and resolved at the first is measured and monitored. opportunity. These improvements involved more staff training and better Corporate Responsibility IT systems and working methods. In Last year the Challenge Panel asked addition to its Network Maintenance that the Bristol Water Board set Partnership Contract, Bristol Water out a clear corporate responsibility brought in district inspectors and statement and policy that enshrines district managers to the operational the company’s and its shareholders’ call centre so that they could provide responsible attitude towards the the call operator with immediate communities where it operates, how its technical knowledge and solutions investment strategy affects customers, during a customer enquiry. its policy on shareholder dividends and the performance related element of Therefore, the Challenge Panel is executive pay. disappointed that these initiatives did not translate into improved The Challenge Panel considers this performance against this metric in action has been covered in three ways. 2019/20. However, it is encouraged to see that, in the ICS Business 1. The annual Bristol Water Trust Benchmarking Survey in late 2019, Beyond Water statement includes
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Focus for 2020-21
The Challenge Panel will routinely monitor and challenge the company’s performance against its new Performance Commitments for AMP7. Its general focus will be on customer service, environmental improvements, and progress against the company’s Social Contract initiatives.
The Challenge Panel will also clarity on company’s use of hard performance against the Biodiversity review and challenge the company’s interventions and the promotion of Index is measured and assured and customer engagement activities and behavioural change by stakeholders how it translates into environmental their outcomes during 2019/20. (eg farmers and wishes to review improvements. It also wishes to source data and raw water quality review source data and to understand The Challenge Panel will be carrying sample analysis to see evidence of the relationship between the out a Skills Audit of its membership their impact. It will also explore the company’s statutory environmental in 2021. relationship between the company’s obligations and any additional statutory environmental obligations environmental improvement work In this report the Challenge Panel and any additional environmental associated with its Social Contract. has noted some specific areas of improvement work associated with its The company has agreed to engage performance where it wishes to Social Contract. with the Challenge Panel on these focus its review and challenge during issues during the coming year. 2020/21 (the first year of AMP7). Biodiversity Index These areas include: The company’s biodiversity targets Meter Penetration in AMP7 are more stretching than Having restricted its operations, Raw Water Quality in AMP6. The Challenge Panel the company intends to have more The Challenge Panel will be seeking wishes to better understand the how control over meter fit operations
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and the end-to-end customer Bristol Water has informed the Social Contact journey in AMP7. It has also further Challenge Panel that one of its The Challenge Panel looks forward increased its marketing activities biggest challenges is customer to reviewing the first year of and reinstated internal meter fits. perception and the understanding the company’s Social Contract In recognition of the slowdown in of the value of water, and in how performance in late 2020/21. the property market in its supply the company works with customers However it notes that progress area, the company accepts that it and other stakeholders to educate may be affected by the coronavirus must transform its promotion of them on demand management and pandemic which had emerged water meters in order to ensure the benefits of water efficiency. around the start of 2020/21 and it that customers are attracted to will be monitoring closely how the this opportunity. It has therefore The Challenge Panel notes that company manages the impact on designed an extensive marketing consumption has been rising the delivery of the first year of Social programme, including work with generally across the industry. Contract programme. local partners such as Aardman Influencing customer behaviour Animations, to help increase in the future, including water Competition and Markets Authority metering uptake. consumption, forms part of The Challenge Panel is aware of the company’s customer and the Ofwat referral of the Bristol The company believes it now has a community focussed Social Water Final Determination to the much stronger opportunity to meet Contract. The Challenge Panel has CMA and is looking forward to its meter installation target. welcomed this innovative approach making submissions to the CMA on and is involved in its planning and behalf of customers. In particular The Challenge Panel will monitor the monitoring of performance. the Challenge Panel will be making the company’s performance in the written submissions as required and coming year. Waste Disposal Compliance taking part in any video discussion The Challenge Panel is very keen with Ofwat and the CMA. The Per Capita Consumption to understand the compliance Challenge Panel notes that the CMA The company believes that its issues at Blagdon, the company’s published its Provisional Findings recent performance on per capita statutory obligations the site and in September 2020 and is expected consumption was partly impacted by the opportunities for improvements, to publish its Final Determination the meter penetration performance their timing and linkage to wider in December 2020. The Challenge (as customers who are metered tend customer preferences for the Panel will make any additional to use less water, as they are able to environment. The company has submissions as appropriate. understand the direct link between agreed to engage with the Panel water consumption and the impact on these issues during the coming on their bill). year.
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CONCLUSION
The Annual Report of the Bristol Water Challenge Panel for 2019/20 is special in that it concludes the five year business planning period that is set by Ofwat.
Every water company in England the scrutiny, attention to detail and As Independent Chair of the Bristol and Wales is addressing the same challenges made by the Challenge Water Challenge Panel, I wish regulations and opportunities to Panel are critical in ensuring that to express my sincere gratitude improve service at the same time. Bristol Water becomes the best and thanks to the members of the The water regulators, whether company, not just in the sector, but Challenge Panel who give their Ofwat, the Environment Agency, also across other businesses that insight, time and know-how on a Natural England or the Drinking serve individual households voluntary basis in what is critical, Water Inspectorate, have a much or customers. intense and detailed work. I am broader view than the Challenge especially grateful to my Deputy Panel could possibly have of the The focus of the Challenge Panel Chairman Anthony Denham and level of corporate ambition, where has also included the monitoring report writer Jeremy Hawkins for the cutting edge of performance of the performance of Bristol their dedication and commitment within the sector may lie, what Water against the performance to the work of the Challenge Panel. investments are financeable or not commitments it made in its current The secretariat provided by Bristol and where, taken together as an business plan. The Panel also has Water, together with its Regulations, industry, tremendous gains can an eye to the future, ensuring that Environment and Customer Service be made for the benefit of people company is embedding change teams, have been responsive to across the country. and innovative ways of working the Panel’s quest for answers and in order to achieve the stretching supportive in organising meetings, While comparisons between performance commitments set out in refreshments and information. Lastly, companies can be made on its new business plan. The Panel will I am grateful to Bristol Water Chief performance, the proprietary always point out areas where the Executive Mel Karam and Bristol nature of a business plan makes company excels and areas where Water Chairman Keith Ludeman such comparisons at the business its performance can be improved. for keeping me appraised of Board planning stage impossible. What That nearly 25% of the challenges considerations and the openness Bristol Water, like other water made by the Challenge Panel during and transparency with which they companies, can do, is to ensure this five year period have changed have approached the work of the that it is in tune with the views, the way the company does, or will, Challenge Panel. needs, priorities and preferences of do its business speaks to the way it its customers and that, in looking attempts to carry out its role. After at other industries and sectors, it all, it is only what the customers of is ambitious and innovative in the Bristol Water deserve. way it plans and executes its service going forward. There is much to do in the upcoming year and throughout the next five- This report records the Challenge year business planning period. At Panel’s work and the impact it has the time of writing, the decision made on the way Bristol Water made by the Competitions and operates at many levels of its Markets Authority regarding the business. The Panel has a unique Final Determination for Bristol Water role in the governance of a monopoly is yet to be known. This means that industry such as water. Most the Panel does not have specific and customers in the population serviced detailed performance commitments by Bristol Water have no choice for Bristol Water for the next five regarding their water supplier as few years. It does, however, know the have wells that produce water that general direction of travel and that is safe to drink and are dependable customer views will be integral in in all weather conditions. As such, setting these new goals.
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Appendix 1: Members
Challenge Panel members who have contributed during 2019/20
Name Organisation Peaches Golding OBE CStJ Chair Tony Denham Deputy Chair Jeremy Hawkins (Report Writer) Creoda Consulting Michael Barnes CCW Mike Bell CCW Tamsin Sutton Environment Agency Dr Mark Taylor Natural England Cllr. Robert Cleland North Somerset Council Cllr. Terry Napper Mendip DC Dr Tabinda Rashid-Fadel NHS Luke Hasell The Story Group Cllr. Michael Gay Mendip DC [Replaced Cllr Terry Napper] Cllr. Karin Haverson North Somerset Council [Replaced Cllr Robert Cleland]
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Appendix 2: Bristol Water Performance Commitment Results
Outcomes and Performance Unit Actual Actual Actual Actual Target Actual Commitments 15/16 16/17 17/18 18/19 19/20 19/20
Reliable supply
A1: Unplanned customer minutes lost Mins/prop/yr 15.5 13.1 73.7 14.7 12.2 11.1
A2: Asset reliability – infrastructure Assessment Stable Stable Marginal Marginal Stable Stable
A3: Asset reliability – non-infrastructure Assessment Stable Stable Stable Stable Stable Stable
Resilient supply
B1: Population in centres > 25,000 at risk Pop at risk 288,589 288,589 9,063 9,063 9,063 9,063 of asset failure
Sufficient supply
C1: Security of Supply Index Index 100 100 100 100 100 100
C2: Hosepipe ban frequency Days/year 1.5 3.1 3.1 3.1 10.2 3.1
Safe drinking water
D1: Mean zonal compliance % 99.93 99.97 99.93 99.99 100 99.97
Water is good to drink
E1: Negative water contacts Contacts/year 2,329 2,162 1,711 1,934 2,221 1,712
Efficient use of resources by company
F1: Leakage MI/day 44.2 47.4 49.6 45.8 43.0 40.9
Efficient use of resources by customers
G1: Meter penetration % 47.3 49.3 52.7 56.0 65.9 59.0
G2: Per capita consumption Litres/head/day 141.1 144.1 144.5 148.3 142.0 144.6
Sustainable environmental impact
H1: Total carbon emissions kgCO2e/person 35 32 28 23 20 19 H2: Raw water quality of sources Assessment +20% +11% -1% -14% +/-<10% for -25% Deteriorating Deteriorating Marginal Improving >2 years Stable Improving
H3: Biodiversity Index 17,649 17,650 17,657 17,668 17,653 17,670 Assessment Improving Improving Improving Improving Improving Improving
H4: Water disposal compliance % 96 96 98 98 100 98
Affordable bills
I1: Percentage of customers in water % 0.4 0.9 0.0 0.0 1.8 0.0 poverty
Satisfied customers
J1: Service Incentive Mechanism (SIM) Score 85.1 85.9 83.4 84.7 87.8 82.5 & Ranking Top 5 Top 5 Outside Top 5 Outside Top 5 Top 5 Outside Top 5
J2: General satisfaction surveys % 83 86 87 89 >93 87
J3: Value for money % 70* 72 69 68 72 75
Easy to contact
K1: Ease of contact from surveys % 95.0* 94.4* 93.1 91.4 >96.5 91.8
Bills that avoid confusion for customers
L1: Negative billing contacts 2,301 2,301 3,096 2,300 1,595 2,170 1,274
* re-stated performance following amendments to reporting methodology
34 CHALLENGE PANEL
Appendix 3: Terms of reference for BWCP during AMP7
1. Role of customer research and customer 3.1. Delivery of Bristol Water’s 2020- representation in developing strategy. 2025 Business Plan 1.1. The Bristol Water Challenge ■ Monitor and challenge Bristol Panel (BWCP) is the independent 2.2. The BWCP will report to Ofwat, Water’s delivery of its performance Customer Challenge Group (CCG) the Bristol Water Board and the commitments (and any associated set up in accordance with Ofwat’s public on the performance of Bristol penalties and rewards that may methodology for its Price Review Water in delivering its service apply) as set out in the business 2019 (PR19). Ofwat defines the role commitments against its 2020-2025 plan. of CCGs to “provide independent Business Plans. ■ Compare Bristol Water’s challenge to companies and provide performance with the wider water independent assurance to us on the 2.3. The BWCP will challenge, industry. quality of a company’s customer comment and advise Bristol Water ■ Scrutinise the company’s annual engagement; and the degree to which on its plans to educate, inform charging proposals including the this is reflected in its business plan”. and consult with its customers on recovery of any underperformance its long term planning and on the and ‘out performance’ revenue 1.2. The role of the BCWP is to act development of its 2025-2030 from such mechanisms as outcome in the interests of Bristol Water’s Business Plan, its wider strategy delivery incentives, revenue customers and independently and on the delivery of its current correction mechanisms, etc. scrutinise and challenge the Performance Commitments. This will ■ Review data assurance processes company’s engagement strategy help ensure that the outcomes and to ensure a proportionate and and how this drives decision making service levels customers expect from transparent approach. in its business planning, and on the Bristol Water are met, are reflected ■ Challenge monitor and input into delivery of its service commitments. in the company’s plans and that how Bristol Water communicates The BWCP reports to Ofwat, appropriate incentives are in place to with its customers on performance, the company’s Board, and to its safeguard customers should those how it interprets responses from customers. expectations be exceeded. customers, and how this is reflected in its long-term strategy. 1.3. In carrying out its role, the BWCP 2.4. The primary role of the BWCP ■ Provide an independent annual will compare the performance and regarding business plans and report to Ofwat, the Board of plans of Bristol Water with those of challenging business performance, Bristol Water and the public the other regulated water companies customer engagement and on how Bristol Water has in England and Wales and other utility transparency of Bristol Water will be delivered against its performance providers, and challenge the company influenced by Ofwat’s requirements of commitments for the benefit of its by using local, regional, national and CCGs, which are likely to change over customers. international benchmarks in service time. Bristol Water and the BWCP delivery and customer engagement. recognise that there is also value in 3.2. Development of the 2025-2030 this scrutiny irrespective of Ofwat’s Bristol Water Business Plan (PR24) 2. Purpose requirements, and this is also part of ■ Subject to any direction from the BWCP purpose. Ofwat - review, challenge and 2.1 The primary purpose of the BWCP comment on the development of is to act as an independent body 2.5. Key points from all sub-groups 2025-30 Business Plan in terms of to ensure that the voice of Bristol and main work areas will always be representing the interests of both Water’s customers remains core to discussed at the next BWCP meeting, customers and the environment. the company’s decision making, both including any recommendations ■ Monitor, challenge and input into in the business planning process and for further discussion or action and Bristol Water’s development of its in monitoring business as normal possible inclusion in the annual report. customer policies, and its ongoing activity such as research, assurance, Decision making authority remains research/engagement programme performance and serving customers with the BWCP. with customers to ensure it in vulnerable circumstances. It provides a robust, balanced and will scrutinise and challenge the 3. Activities proportionate evidence base across company’s customer impacting its diverse customer base. activities from the point of concept The work of the BWCP falls into ■ Advise and challenge on the to delivery, through the frameworks several main areas: phasing of delivery of outcomes in place, including the triangulation to maximise the affordability and
35 CHALLENGE PANEL
Appendix 3: Terms of reference for BWCP during AMP7
acceptability of the overall business Contract framework ahead of April during the process. plan. 2020 and beyond in the form of ■ Engage and challenge longer-term continuous improvement. 4. Membership views around risk and resilience. ■ O versee and challenge the delivery ■ Challenge regulatory compliance of the Social Contract programme 4.1. The BWCP will have an regarding the environment from a on behalf of customers. independent Chair recruited by Bristol customer perspective. ■ Challenge transparency of Water and a Deputy Chair appointed ■ Challenge Bristol Water to work reporting in relation to the Social to the group following a selection with other water companies in Contract. process. The Chair and Deputy Chair areas of overlap for the wider ■ Challenge the application of the will each receive a stipend. interest of customers, the sharing mechanism. environment and water resources ■ Challenge the risk to delivery of the 4.2. Ofwat requires that CCG in the Bristol Water area. overall Social Contract programme membership should reflect local ■ Consider the trade-off between and its components. circumstances and challenges different levels of service and ■ Contribute to and challenge the and include a representative from bill profiles regarding delivery of development on the following the Consumer Council for Water specific major schemes to improve year’s programme of activities to (CCW). Chairs should not represent service and ensure the views of ensure that viewpoints are sought, organisations or any particular groups Bristol Water’s customers are fairly represented and considered. of customers. The environmental and reflected in the business plan. drinking water quality regulators ■ Incorporate the range of objectives 3.5. Helping Customers in Vulnerable should play a significant role as set out in future Ofwat customer Circumstances informing CCG discussions and engagement policy statements and ■ Review, challenge and comment CCG reports should highlight any expectations for PR24. on performance against the concerns raised about the ability of ■ Provide an independent annual Vulnerability Action Plan. the proposed plan to meet statutory report to Ofwat, the Board of ■ Affordable bills and value for obligations. Bristol Water and the public on money for all. how Bristol Water has developed ■ Customers who are struggling or at 4.3. The BWCP will represent Bristol its 2025-2030 Business Plan for risk of struggling to pay. Water’s domestic and business the benefit of its customers. ■ Customers in circumstances that customers, it will seek to include make them vulnerable or at risk of members invited from: 3.3. Customer Related Regulatory being vulnerable. ■ Consumer Council for Water (CCW) Change ■ Local Authorities elected ■ Review and comment on any 3.6. Ofwat representatives proposals for regulatory change Contribute to Ofwat’s regulatory ■ Natural England (NE) that may impact on customers, function by commenting on ■ Agencies dealing with the local including the possible extension consultations as they are issued, environment. of the retail market to include particularly: ■ Debt Advice Agencies. household customers. ■ PR24 Business Plan Methodology ■ Environment Agency (EA) ■ Review the company’s ■ Bristol Water business plan ■ Drinking Water Inspectorate (DWI) communication about regulatory submissions ■ Other local customer changes with customers. ■ Draft Determination responses representatives as appropriate ■ Respond to Ofwat (and other) ■ Respond to Ofwat (and other) consultations as appropriate. consultations as appropriate Topic specialists may be invited to ■ Monitor Bristol Water’s risk attend meetings at the discretion of assessment programme where 3.7. Competition and Markets the Chair to aid the members in their it affects customer priorities and Authority (CMA) understanding of that topic. preferences. To review, comment and challenge on Bristol Water submissions to Independent members and charity 3.4. Social Contract (as set in slide 12 the CMA, using the same BWCP organisations will receive a day rate of the brief for the 21 November 2019 methodology as it would for a for attendance at meetings and Social Contract Subgroup) Business Plan submission. This could will be reimbursed for reasonable ■ Contribute to and challenge the include overview and review of any expenses incurred in relation to their ongoing development of the Social further customer research needed membership of the BWCP.
36 CHALLENGE PANEL
Appendix 3: Terms of reference for BWCP during AMP7
update on matters concerning the The EA’s membership of the BWCP 5.2. Sub Groups BWCP. will not affect its function as the ■ T he BWCP may hold periodic statutory regulator and enforcing subgroup meetings for individual 5.4. Agendas authority in respect of Bristol Water topic areas that require specific The Chair, in consultation with and it will continue to take all focus as agreed with Bristol Water. Bristol Water, will determine meeting regulatory measures, as appropriate, There are established quarterly agendas. Standard items will under any circumstances, in meetings for subgroups covering normally include: accordance with its statutory role. Customer Engagement and the ■ Private sessions Social Contract. ■ Minutes and matters arising from 4.4. The BWCP will ensure that Bristol ■ T he BWCP may establish ad hoc previous meetings Water consults all segments of the sub-groups or task and finish ■ Review of the Challenge Log its customer base, including minority groups to consider specific topics outstanding items Ethnic groups, the vulnerable and where this is considered beneficial ■ Quarterly update on the delivery of those hard to reach. to fulfilling the purpose of the panel. performance commitments ■ E ach sub-group will be chaired by ■ Update of ongoing customer 4.5. BWCP Members are expected to the Chair or Deputy Chair, its terms research and engagement fully participate in delivering its work. of reference will be set by the main ■ Feedback from sub-groups Members are expected to attend BWCP and meeting dates agreed all the main BWCP meetings or with the Chair. 5.5. Meeting Evaluation send an appropriate substitute or to ■ S ub-groups will provide feedback In its presentations to the BWCP, the provide input in advance if unable to to the next BWCP meeting, members should expect Bristol Water attend. Members may attend through including any recommendations to report against the following five telephone conference if necessary. All for further discussion or action. criteria: members are welcome to attend any Decision making authority remains ■ How it is customer led sub-group meeting. with the BWCP. ■ Impact on customers ■ How it relates to Best Practice and 5. Meetings 5.3. Support and Administration Innovation within the industry ■ Bristol Water will provide ■ Ethical Issues, eg differing 5.1. Frequency administrative services to the ‘willingness to pay’ methods, ■ The BWCP will meet at least BWCP and its subgroups. intergenerational concerns, etc twice a regulatory year. Additional ■ T he agenda and papers (including ■ How impactful are the challenges; meetings will be arranged as the written results of actions from what is our ability/opportunities to appropriate depending upon the the previous meeting) will be made challenge. workload. available to members at least five ■ Private sessions of the BWCP working days before each meeting. Assessment of Bristol Water’s members without Bristol Water will Members of the group will be presentations and its own be held at the beginning and end provided with access to a website performance will be carried out by the of each regular meeting. Additional file share station administered by BWCP during the private session at private meetings will be arranged Bristol Water. Provided papers are the end of each meeting. as required. available in advance members will ■ Between meetings, the BWCP be expected to have read all papers 6. Governance will be provided with information before each meeting. updates and/or asked for input by ■ Minutes of the meeting will be 6.1. Ofwat states that “To build trust email. taken by the Report Writer and a and legitimacy we would like to see ■ Bristol Water will provide telephone draft checked by the Chair before an increased focus – by companies conference facilities for the use being distributed no later than two and the CCGs themselves – on CCG by members between the routine weeks after each meeting. governance and funding process meetings if required. ■ Confidential items will be duly transparency.” ■ Independent non-executive marked in the Minutes and members of the Bristol Water members are expected not to 6.2. Chair and Deputy Chair Board are welcome to attend any disclose these outside of the BWCP ■ The Chair and Deputy Chair are meeting of the BWCP or its sub- or Bristol Water. appointed following an open groups. ■ Bristol Water will provide a regular interview process.
37 CHALLENGE PANEL
Appendix 3: Terms of reference for BWCP during AMP7
■ The role of the Chair and Deputy 7. BWCP Reports Chair is to encourage full, frank and inclusive debate, identify areas of 7.1. The principal published output consensus, summarise differences will be the BWCP’s Independent and distil possible solutions report to Ofwat and the public which emerging or needing further will accompany Bristol Water’s 2024 investigation. Business Plan, in accordance with ■ The roles will be sufficiently Ofwat’s published timetable. independent from Bristol Water to ensure they can 7.2. Other published outputs of the challenge effectively, and to BWCP will be: give proportionate assurance to ■ Minutes of all main meetings. both Ofwat and Bristol Water ■ Annual report on the delivery customers. of Bristol Water’s performance ■ The Chair or Deputy Chair will commitments to its customers. attend meetings of the CCG Chairs ■ Annual report on the operation of meetings organised by Ofwat as the BWCP during the year. required. ■ T he BWCP will submit subsequent ■ The Chair or Deputy Chair may independent reports as required by attend workshops, seminars and Ofwat. conferences organised by Ofwat or other water sector representative 8. Review of Terms of Reference bodies where topics of interest to the customer may be discussed. The Terms of Reference for the BWCP ■ The Chair and Deputy Chair should will be reviewed and agreed by the ensure that they act independently membership from time to time, but not of any affiliations with other bodies, less than once every three years or such as parent organisations, and as required by any material change in oversee the group in an objective Ofwat’s methodology or requirements manner. for CCGs. ■ The Chair will have regular meetings with an independent non- executive member of the Bristol Water Board to provide feedback and assurance, thus ensuring both parties – Board and Challenge Panel – understand their respective complimentary perspectives on issues of importance to customers. ■ Bristol Water have identified an independent non-executive Board member whose remit specifically includes engagement with the BWCP and to reflect BWCP discussions within the Bristol Water Board.
6.3. Members ■ Members will be required to formally approve the BWCP Terms of Reference. ■ A work programme and protocol will be agreed with members of the group.
38 Appendix 4: Glossary of acronyms used
AMP Asset Management Period – Five-year period for which the Price Review sets the company’s revenue and thus the customers’ bills. AMP5 started in April 2010, AMP6 in 2015, AMP7 in 2020 and AMP8 in 2025.
APR Annual Performance Report – Published by each company by a set date in mid-July each year; contains full details for the company’s performance against PC targets as well as financial performance and ODIs
BW Bristol Water
BWCP Bristol Water Challenge Panel – BW’s CCG.
CCG Consumer Challenge Group – Ofwat requires each water company to set up a CCG whose primary purpose is to challenge the customer engagement of the water company during the construction of its next AMP Business Plan
CCW The Consumer Council for Water – Statutory water customer body
CESG Customer Engagement Sub Group of the BWCP – reviews and challenges BW performance in customer engagement and the use of the survey results
CMA Competition and Markets Authority – the organisation the company appeals to if they cannot accept the Ofwat FD
C-MeX Customer Measure of Experience – replaces SIM for Domestic Households in AMP7
CRI Compliance Risk Index produced by the DWI – replaces MZC in AMP7
DC District Council
DD Draft Determination of Prices – after the submission of the company’s Business Plan and before the FD. It gives the company an indication of how Ofwat views the submitted Business Plan
D-MeX Developer Measure of Experience – applies to the service provided to Developers and Self Lay Providers in the Retail Market for Non-Household customers; it is new for AMP7
DWI Drinking Water Inspectorate
EA Environment Agency
FD Final Determination of Prices – sets the company’s revenues and thus the customers’ bills for the next AMP
IAP Initial Assessment of the Business Plan – New in 2019 – gave the company a very early view of how Ofwat viewed the Business Plan; and set the DD for the fast track companies
ICS Institute of Customer Service
NE Natural England
OCP Bristol One City Plan
ODI Outcome Delivery Incentive. Delivery of each Performance Commitment will be assigned a financial or reputational incentive by Ofwat in the Final Determination
PC Performance Commitment – Performance measures supporting the Outcomes. The levels of performance (targets) were set by Ofwat in the Final Determination
PCC Per Capita Consumption – a measure of the volume of water used by each person
PR14 Price Review 2014 – set the customer bills for AMP6
PR19 Price Review 2019 – set the customer bills for AMP7
SC Social Contract
SCSG Social Contract Sub Group of the BWCP – Reviews and challenges the BW Social Contract planning and implementation of initiatives
SDG Sustainable Development Goals
SIM Service Incentive Mechanism – a measure on the company’s customer facing activities; now replaced by C-MeX
WINEP Water Industry National Environment Programme – measures the completion of schemes aimed at water abstraction without negative impacts on the environment
39