Agenda and minutes

RESOLVED that the minutes of the meeting held on 27 July 2016 were an accurate record and that they be signed by the Chairman.

1.    Sally Irgin attended to provide an update on the work of Ofwat.  Ms Irgin is a Director of Ofwat’s Casework Programme which is the organisation’s front line service for customer complaints about water companies.  It is also the part of the organisation responsible for determining disputes and taking formal enforcement action where Ofwat has powers to do so. Over the last three years Sally has led Ofwat’s work on developer-related disputes and a specific project working with water companies to improve their delivery of services to their developer customers.

2.    Ms Irgin outlined the background of Ofwat to the Committee, explaining that it served as the independent economic regulator of the water and sewerage sectors in England and Wales.  They had defined duties and responsibilities set out in legislation requiring them to protect customers, enable efficient, well-run companies to finance their functions and to ensure long-term resilience.  These functions were exercised within the framework of published Government police.  Their vision for the water sector was one where customers and society had trust and confidence in the vital public water and wastewater services.

3.    Outlining the scope of their work, Ms Irgin stated that Ofwat regulated ten regional monopoly companies, eight local water only monopoly companies, five new appointees and a growing number of retail licensees.  Ms Irgin explained that they worked on an outcome focuses approach which was supported by a toolkit designed to address the various challenges within the sector.  The focus was always on finding a co-operative solution through liaison and engagement between customers and providers prior to the consideration of formal intervention.

4.    In relation to water company engagement with developers, Ms Irgin explained that historically there had been limited and varied recognition by water companies of developers as customers and this hampered effective joint planning and co-operation.  This was exacerbated by inconsistent levels of service and sometimes complicated where the competitive market has not been as effective as it could be.  The complex charging regime has presented difficulties for the development sector and caused concerns in relation to housing growth.  There was limited precedent in law for handling disputes which sometimes slowed the process and caused greater frustration for customers and water companies.  However, Ms Irgin reassured the Committee that good progress had been made by all parties in responding better to issues and resolving disputes more quickly.

5.    Ms Irgin highlighted the significant benefit brought about by the introduction of the voluntary standards for measured performance.  She explained that 24 levels of service measures had been agreed by WaterUK in consultation with customers and water companies.  This provided transparent comparison of performance for the first time and the resulting company league tables have produced a strong reputational incentive.  This work had helped support the provision of more resources around development work as well as encouraging significant improvements in performance.  Ofwat was also able to make more effective interventions earlier on by targeting particular areas of poor performance, getting assurance on numerous improvement plans from  ...  view the full minutes text for item 8.

1.    Paul Kent attended to an update from Southern Water.  Mr Kent is the Environment and Wastewater Strategy Manager, accountable for identification of expenditure requirements of above and below ground wastewater assets, to maintain and improve performance.  He is also responsible for agreeing environmental improvements required to meet legislative drivers. Developing an integrated catchment approach to delivering environmental improvements. Also responsible for identifying future investment requirements arising from development and growth in the southeast.

1.    Mr Kent provided an overview of the activities of Southern Water, notable that Southern Water take nearly 70% of its water from underground sources, called aquifers, 23% from rivers and 7% from storage reservoirs.  Each day, it treats and recycles 718 million litres of wastewater at 365 treatment works after it is pumped through a network of 2,375 pumping stations and 39,600km of sewers.  Mr Kent also commented that Southern Water operated in a crowded market place and that it was unusual for so many companies to be active in the area covered by the south east.

2.    Mr Kent explained that Southern Water had a statutory duty to provide service; regardless of the level of capacity and that this had led to issues where excess demand has had negative consequences for the water and sewage network.  He noted specific examples such as Headcorn developments where local factors had to be taken into account when planning and arranging large scale developments with water and sewage connection requirements.

3.    Mr Kent clarified that Southern Water did not have a formal role with the planning process but he advised that effective planning of work and developments in terms of water needs was critical to allowing smooth and timely implementation when required.  He noted that where capacity was already at maximum, new developments would necessitate new investment and that this could only be facilitated when reliable information was available through effective forward planning with developers and planning authorities, emphasising that planning certainty was vital for Southern Water to justify additional investment, lest money and time be wasted on works that go unused.  He explained that information sharing and joint working with partners, local authorities and developers had improved but there remained room for improvement.  He highlighted the Ebbsfleet Garden City project as an example where initial capacity and connection requests were received but not implemented at the time due to the investment required, which had been proved a correct decision given that the works were still not needed several years later.

4.    To support better communication and effective planning, water companies had been trying to make connections to the system conditional on various factors within developments and planning applications.  Mr Kent advised that raising the eventual utility needs and related work time and cost investment at an early stage had been beneficial in ensuring developers were able to plan their projects more effectively.  Linked with this, Mr Kent explained that progress had been made on ensuring better communication over connection work and prices too place with developers at  ...  view the full minutes text for item 9.