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South West Water announces radical 'New Deal'

As part of its business plan for 2020-25, South West Water is promising lower bills, improved service, better environmental protection and a stake and greater say in the company for customers, with an enhanced opportunity for extra rewards should South West Water beat its targets.

 Pennon Group chief executive Chris Loughlin said the New Deal 'represents a big leap forward for the water industry' Pennon Group chief executive Chris Loughlin said the New Deal 'represents a big leap forward for the water industry'

The plan, entitled ‘A New Deal’, follows South West Water’s biggest ever customer consultation and was submitted today (3 September) to Ofwat, the water industry’s economic regulator, as part of the industry’s five-yearly price review.

The New Deal, which will now be assessed by Ofwat, includes plans to:

  • Keep the average bill below inflation (delivering a decade of bill freezes, reductions or below inflation rises up to 2025), plus more pioneering support for those who struggle most to pay. By 2025 the average bill will be lower than it was in 2010
  • Spend more than £1 billion to improve services, enhance operational resilience and deliver the largest programme of environmental improvements for 15 years
  • Offer customers a £20 million shareholding and a greater say in the business, building on the South West Water’s pioneering WaterShare scheme, first introduced in 2015, which rewards customers for the company’s outperformance (and protects them from underperformance), with extra investment or even lower bills

Other highlights include:  

  • Increased protection for bathing waters and shellfish waters
  • Further work in river and reservoir catchment areas to improve raw water quality and natural water storage in the landscape, plus increased protection from flooding and drought through the expansion of flagship catchment management schemes
  • Major upgrades of drinking water treatment works, including Stithians, St Cleer, Prewley (near Okehampton) and Restormel (near Lostwithiel)
  • A further 15 per cent reduction in leakage
  • An expansion of award-winning campaigns to reduce sewer blockages and flooding (‘Love Your Loo’ and ‘Think Sink’)
  • Initiatives to ensure zero harmful pollutions by 2025
  • Improvements to achieve sector-leading customer service
  • The launch of a water efficiency initiative for unmetered customers
  • No water restrictions
  • A reduction in supply interruptions

Chris Loughlin, chief executive of South West Water's parent company Pennon Group Plc, said: “Five years ago we set ourselves stretching performance commitments. Today, drinking water is top quality, leakage targets have been met, supply interruptions, sewer blockages and flooding have all been reduced and bathing water quality has hit record highs.

“South West Water is on track to deliver its 2015-20 business plan, but there’s always more to do. Our new business plan offers all-round improvements in what customers have told us they value most at a price they are prepared to pay.

“As customers have shaped our new plan and will be partners in its delivery, it’s only right that they should be offered a real stake in the business and a greater say in what we do and how we do it.

“That’s why, in 2020, we’re introducing a first-of-its-kind shareholder scheme for customers and a greater opportunity for them to hold us to account. In a natural evolution of our innovative WaterShare scheme, we will continue to share our success with customers.

“The New Deal is the next step forward for us and represents a big leap forward for the water industry, putting more control into customers’ hands.”

Pennon Group's Bournemouth Water, meanwhile, will also adopt the 'New Deal' approach, with around £120 million to be spent on improving services, including the construction of two new state-of-the-art water treatment works, one at Knapp Mill and another, subsequently, at Alderney.

Dr Stephen Bird, managing director of Bournemouth Water, said: “Since welcoming Bournemouth Water to the Pennon family, we have built upon its industry-leading service and drinking water standards, maintained some of the lowest water bills in the country and introduced a new support scheme for billpayers.

“The New Deal is the next step forward for Bournemouth Water and South West Water, and represents a big leap forward for the water industry, putting more control into customers’ hands.”

Nick Buckland OBE, chair of the WaterFuture Customer Panel, the independent panel of consumer and environmental stakeholders tasked with scrutinising and assuring South West Water’s development of the plan against customer wishes, said: “We believe this plan reflects the expectations of customers, delivering more of what matters to them and including a truly radical approach to empowering customers through the WaterShare share scheme.

“At every stage of the process the Panel has challenged and tested South West Water’s customer engagement and proposals.

“We are pleased that the company has responded by delivering an ambitious and progressive plan which will bring multiple benefits to people, communities, business, and the environment of the unique regions the company serves.”

Author: Robin Hackett, editor, WWT
Topic: AMP Cycle , Policy & Regulation
Tags: ofwat , South West Water , price review , resilience , Bournemouth Water


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