Peter Simpson, chief executive, Anglian Water Company strategy, Policy, Policy & regulation, Regulation, Strategy & management, Water, Opinion, Peter Simpson, Anglian Water

"My expectation is that 2019 will continue to see a high level of focus on the water industry"

As we wave goodbye to 2018 and say “hello” to 2019; the final year of this round of water industry business planning, we’re ready and getting “fit for the future”.

I was pleased that the calmer, mild weather between Christmas and New Year gave a brief respite to the front-line teams across the business who have worked so incredibly hard this year. Having dealt with the impact of “Beast from the East” in early 2018, followed by the prolonged hot, dry summer, the last year provided some challenges in keeping customer’s taps running while ensuring our environment is protected.

The respite, however, could be brief as the Meteorological Office have just issued the same forecast for the next three months as they did last year with “sudden stratospheric warming” making an unwelcome return, meaning we could see another blast of cold weather in the coming weeks. Fortunately, our teams are already preparing for such an eventuality.

2018 was a very busy year operationally, but it was also an important year as water companies submitted their proposed business plans, from 2020. These plans are now with our regulator Ofwat for approval, and we’re expecting to hear their initial thoughts later this month.

Naturally, we’re very proud of our plan. It’s been written following the most extensive engagement we have ever had with customers, and addresses the huge challenges faced in our region from housing growth (200,000 new homes by 2025, excluding those already planned in the Oxford to Cambridge corridor!) and climate change.

Meeting these challenges has meant stretching ourselves further in terms of investing to develop more resilient infrastructure to allow the transfer of water from different parts of our region, committing to a further 22 per cent reduction in leakage (despite our already industry leading position) and reducing consumption through an extensive program of smart metering (for our already largely metered customers). It has also meant developing a better understanding of those who struggle to pay for water with a commitment to better help 475,000 of our customers per year.

2018 saw our board responding positively to the challenges posed by Jonson Cox and Michael Gove at the City Conference. Anglian Water now has independent directors as a majority on its Board, has commenced de-gearing and reinvestment (£165 million), and was the first private water company to remove and liquidate its Caymans company (which was a remnant of securitisation in 2002 and had been dormant ever since). We also removed a £1.6 billion inter-company loan which had in the past inadvertently made it seem like our shareholders were consistently making super returns. This was not the case, but we recognise that transparency is crucial for our customers, investors and stakeholders to continue to trust us.

My expectation is that 2019 will continue to see a high level of focus on the water industry especially with Labour’s focus on taking the sector back into public ownership.

Despite these steps and the fact that we were voted Utility of the Year and Glassdoor’s Best Place to Work, there is no room for us, or the industry, to be complacent. We must continue to deliver for our customers despite challenges like extreme weather and Brexit. We support the government’s proposed EU “deal” as being the most pragmatic way forward and will continue to work closely with Defra and other companies through Water UK on contingency plans in the event of a “no deal” scenario.

Importantly this year, we need to move on from talking about the undoubted benefits delivered since privatisation to continuing to tackle the issues that matter most to our customers in the 21st century; like driving down leakage and protecting the environment. As CEOs we know the wider social, environment and economic role played by our companies and we remain committed to finding even better ways of demonstrating and communicating this to our customers and beyond.

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