Key Issues From Last Year
We faced a number of significant issues last year that affected either our operational performance or service to our customers. We also dealt with the challenges of preparing our business for the future, especially the next five years. Here, we summarise those issues and show how we dealt with them.
Drought and hosepipe ban
The period from January and June of 2010 was the driest six-month period since our records began. The North West of England received only half the amount of rainfall normally expected. This meant that reservoir levels were much lower than we would expect them to be as we entered the summer period. To conserve supplies, we introduced a hosepipe ban, which is part of our Statutory Drought Plan. Find out more about our response to the drought: Drought and hosepipe ban.
Cumbria floods
In November 2009, around six months worth of rainfall fell in Cumbria in one day, causing devastating flooding across the county. This presented us with a huge operational challenge to maintain our services in very difficult conditions. The response from our employees was excellent both in the immediate aftermath of the floods and in the months following. This commitment was evident again in January 2010 during the exceptional wintry conditions. Find out more about our response to the flood: Cumbria flooding.
Restructure
In preparing the company to meet the efficiency targets set by Ofwat in its new price limit proposals for the period 2010 to 2015, we have restructured our business. As a result, approximately 500 people left the group during the 2009/10. Find out more about restructuring.
Pension changes
To adopt a more sustainable approach to the provision of employee pensions, we have amended the terms of our defined benefit pension schemes. This reduces both the future service cost and the future funding risk to the company, enabling the company to retain defined benefit pension schemes for existing members. Find out more about
pension changes.
Price review
Every five years regulator Ofwat conducts a review of all water and wastewater companies. Assessing:
- each company’s required performance and investment outputs;
- how much money an efficient company needs to finance the investment needed to deliver those outputs.
Ofwat then compares these cost requirements to the company’s income to calculate the maximum amount that the company can increase or decrease their water prices – in other words, how much customers will pay. The most recent price review ended when the company accepted Ofwat's Final Determination for 2010–2015 (this is known as AMP5 – the 5th asset management plan since privatisation). As a result, we will be delivering a capital programme worth £3.6 billion over the next five years. Find out more about AMP5.