Agenda item

1.    Rachel Baker, Developer Services Manager gave a presentation to Members of the Sub-Committee which can be viewed here. 

2.    She explained that the estimating and planning was undertaken within South East water and delivery by Clancy Docwra. 

3.    South East Water carried out internal work to change their internal developer services.  This changed the idea that the developer was not a customer; previously the company did not believe that developers were customers.  Customer engagement was crucial.

4.    South East Water were involved in start-up meetings, houses were being built very quickly and there was a need to ensure work reflects timescales.

5.    Mrs Baker explained that there were not many self lay organisations (SLOs) in the South East (5% of schemes), South East Water had been trying to work out why.  It was found that developers felt that they weren’t treated in same way as water customers, so South East Water built a system to log discussions. 

6.    Mrs Baker was part of the Charging Subgroup which was developing the new charging system for water connections.  It was made up of water companies, DEFRA, Water UK lawyer, and a Member of HBA and HBF.  The group has looked at options and aims to build a model to find best way for industry to charge, key is transparency and consistency.  It was thought that many developers were blind to the cost of new charging regime.

7.    Regarding illegal connections, this was not a big problem for South East Water but it was a huge issue for Thames Water with 6000 illegal connections per year, from developers or members of the public. 

8.    Mrs Baker explained that she could understand the hesitancy of other companies but South East Water was still trying to be as proactive as possible.  Developers asked what capacity was available and South East Water would respond so developers could begin building so not to hold up site.

9.    With regards to assets department – South East Water had a 5 year plan and water resources had a 25 year plan.  Developers made initial contact for planning as early as possible.  South East water had worked hard to ensure developers realise they are available and that the best option is for developers to come in and talk to them. 

10. Issues with new developments – there was due to be a group on 8 March where OfWat would discuss what could be done to lift barriers to lack of competition. 

11. A brief discussion was had around Highways and there was surprise that this had not been raised as an issue more frequently as was raised in developer groups. 

12. New charging rules would be available in April 2018, and it was thought that this would encourage competition.  There was also a Government consultation on Fixing Broken housing market.

13. A Member stated that it would help if others would follow the example set by South East Water.  When dealing with major set of developments, what stage did South East Water start planning?

14. It was considered that South East Water did take a risky approach.  When planning applications were accepted South East Water started thinking about putting infrastructure in.  They would have been aware that site was being developed and would have started increasing capacity on the assumption that the development will eventually go ahead.  Looking at sites as early as possible was key. 

15. Mr Bishop expressed the view that South East Water were a good example, it was possible to pick up the phone to the relevant officer and have a conversation.  Other utilities companies had got rid of developer services, over last 15yrs or more, only point of contact was an email and contact was lost. 

16. A Member asked what had driven South East Water to good practice and other utilities were a shambles, it was considered that South East Water saw the problems and dealt with them. 

17. Mrs Baker explained that culturally developer services had a much higher profile in hierarchy than before.   Directors and Managing Directors had to take ownership and were very aware of developer services.  Following further questioning from a Member Mrs Baker explained that South East Water had, previously, got charging wrong and an OfWat review had determined that South East Water had to pay money back and this led to a review and the high profile of developer services.   

18.Mr Bishop explained that whilst the interpretation might be that utilities companies were allowed to do something it didn’t mean that they should be doing it. A Member asked whether the Council should approach Ofwat or the Government and it was considered that the Government was more appropriate, there was not a consistent approach across the county. 

19.Jo Osborn, Head of Communications addressed the Sub-Committee and explained that the long term vision of South East Water was thinking ahead.  She explained their Water Resources Management Planning process and the key role that members of their Environment Focus Group play.  The current plan focussed on 2015-40.  South East Water was looking to reduce demand whilst increasing supply.  By 2020 90% customers on water meters.   £400million of investment in new water resources. 

20. With regards to the Engagement Plan timetable – conversations would feed into next plan.  97% response rate and in Kent 100% local authorities had fed back into local resources team.   

21. Mrs Osbourne explained that SEW’s draft Drought Plan will be published for consultation by 31 March 2017. 

22. South East Water was working with Southern Water and Affinity on drought plan, the more companies work together helped to avoid confusion.  There was a regional ‘Water Resources in South East’ group which included Thames Water, Portsmouth Water and Sutton and East Surrey Water and took a long term view and identified opportunities to work together.   

23. A Member asked what happened with developments near boundaries of two water authorities? Mr Hollamby explained that it was possible to have a cross border supply, a decision would be made early on to decide who would feed developments, developers would go and see which company had more water and least off site reinforcement.

24. Following invitation from the Chairman Mr Turner asked a question regarding the ‘right to connect’. Southern Water had said that this was a barrier to investing up front. If they did and developers exercise their right to connect, then Southern Water would have no mechanism to recoup their investment costs.  Is that fair and to what extent are developers right?  Mr Bishop explained that part of the 5 year review process was to identify a pot of money to use for infrastructure (money to invest).  Along with infrastructure money Southern Water hold one view and other companies others.  There was inconsistency across the country.  Mrs Baker explained that regarding infrastructure payment developers would say infrastructure money was for growth, and onsite infrastructure.  When developer lays new water main (Self Lay) South East Water paid asset value, but for sewerage didn’t get asset payment but still getting payment from residents.  Inconsistency in funding. 

25. A Member referred to the Growth Infrastructure Framework, Mrs Osborn responded by saying that it was very helpful and that relationships with Mr Turner and team were working well. 

26. A Member referred to run off from developments, Mrs Osbourn explained that South East Water worked closely with highway authorities to ensure that they were as joined up as possible.  Mr Bishop highlighted the planning of developments people were taking up their front gardens for parking; this was causing a big problem in older developments. 

27. The Chairman concluded the meeting by thanking the witnesses for their time, Mr Bishop was asked to provide a few bullet points to form the basis of a letter to be sent from KCC to Government to try to resolve the issues preventing good working relationships between the utilities companies and the developers. 

RESOLVED that:

28. KCC should write to Government to ask appropriate authorities to knit the issues together.

29. Thank witnesses for attending and giving their time to inform and educate Members.  Members of the Sub-Committee had every sympathy with the issues raised and would try to see how Members could help.