With significant regional inequality, “levelling up” is the fair thing to do – between regions but also within them. Transport infrastructure is key here.
All utilities can undoubtedly play a role in driving regional growth. Installing new assets creates jobs and training opportunities, not just within utility companies themselves but also in their supply chains. And as the economy becomes increasingly dependent on modern and resilient infrastructure, company assets can also have wider beneficial effects on growth in their regions. With current low interest rates, now is a good time to do this.
For utilities such as energy and water companies really to unlock local value, however, requires moving beyond a focus of primarily pouring concrete and laying new wires and pipes. To truly deliver public value requires a shift from regional growth to regional wellbeing.
The assets, resources and geographic footprint of energy distribution networks and water companies constitute a major “public good” that needs to be maintained; public goods that deliver not just economic but also social and environmental outcomes.
As such, local people, who pay for new investment through bills, must have a say. Communities need to be involved in discussions about future needs for these public goods – and whether they are willing to invest ahead of need for the future – in a strategic way, not just at price reviews or in one-off citizen climate assemblies.
Local voices are important to ensure demand-side approaches (energy and water saving, and flexibility services in electricity) aren’t overlooked in favour of large-scale supply-side infrastructure. Their inclusion should also mean that solutions that deliver multiple co-benefits, including integrated approaches and circular business models, are also given attention.
In electricity, aligning company roles in terms of delivering on net zero with decentralising and democratising energy at a local level is key.
To support this, Sustainability First has called for the RIIO ED2 price control to provide a new incentive to recognise the DNO regional leadership role. This role should be to promote and co-ordinate specific outcomes on regional, community and local approaches to energy balancing and supply.
In water, as stewards of precious local resources, companies have a key role in working with communities, not only to save water, but to stop pollution and maintain biodiversity. There are an abundance of pilot “green infrastructure” projects in the sector delivering both environmental and social wellbeing (for example, planting around reservoirs to prevent flooding, sequester carbon and improve amenity value). A regional wellbeing approach can help to turn these pilots into business as usual and maximise impact.
To more confidently take on a place-shaping role, and to prove they are worthy stewards of resources and assets, utilities need to build trust with stakeholders, not just to get new schemes through planning and off the ground, but to deliver people-centred services 365 days a year, 24/7. This requires a different mindset than just pursuing regional growth.
To demonstrate that they are delivering regional wellbeing, companies need to provide assurance to local stakeholders – and national regulators and policymakers – that they are delivering public value.
Sustainability First’s Fair for the Future project is exploring the social, environmental and cultural metrics companies need to produce to provide this assurance, and the implications of this for policy and regulatory frameworks.
UK utilities are in need of modernisation. The timing for new investment is good. But we mustn’t waste this opportunity by focusing purely on regional growth. The greater, more enduring, prize is regional wellbeing. The investment/construction challenge is only the beginning.
For companies, taking people and communities with them on this journey is vital. It is the key to striking an acceptable balance between the interests within regions – and between generations.