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  • Interim results

    For the six months to 30 September 2017

    Financial performance |  Corporate resiliencePerformance |  Customers and communities | Environment |  Employees

    Overview

    Wessex Water continues to be a leader for customer service. The number of methods we use to engage with our customers on a day-to-day basis is increasing and we listen and learn from them.

    We aim to deliver leading customer service and are one of only 10 companies in the country to receive the Institute of Customer Service ServiceMark with Distinction.

    One of our key objectives is to ensure bills are affordable for all; we are committed to tackling this issue and to growing the services we offer. 

    Our Priority Services scheme provides tailored support to customers who need it most. To reach as many as possible we are working with energy companies to introduce data sharing at a national level by 2020. 

    Our partnership work on debt advice is essential to ensure we support the most vulnerable. We have made 23 grants through our Money Matters scheme to provide financial capability and money management projects across our region. 

    Twelve community outreach projects reinforce this work providing holistic debt advice – to support our partners further we have developed an online hub to make engagement with us even easier.

    We believe customers should be active participants in the service they receive so we tailor our promotional material to encourage them to use water wisely and avoid misusing sewers. Our summer awareness raising video promoted water conservation and we enabled customers to send photographs during operational work, helping us shorten our diagnosis and repair times. 

    Our Home Check service provides 5,200 households with in-home water and energy efficient device installations and advice. 

    Our 2016 Young People’s Panel, the first of its kind in the water industry, suggested the idea of a cash back guarantee to encourage customers to opt for a meter. This has been adopted and rolled out. 

    We have now launched the 2017 Young People’s Panel to help us focus on ways of tackling behaviour regarding sewer misuse. 

    Our grid project is currently being commissioned and in addition to delivering reductions in abstraction, as agreed with the Environment Agency, it will:

    • connect our water resource zones
    • enable us to move water more effectively around our region
    • ensure we meet future demand
    • improve the resilience of supplies to customers.

    Innovation is fundamental to our success and a vital part of our thinking; the Institute of Water acknowledged our work, giving us the ‘Innovation of the year’ award at their annual UK awards. 

    The award was based on two projects; Entrade, our pioneering nitrogen offsetting programme, collaborating with farmers to achieve alternative methods of nitrogen reduction; and catchment permitting, a novel approach to regulating effluent discharges, maximising benefits at the lowest cost to customers.

    In order to deliver further industry leading service to our customers we must continue to recruit the best-performing individuals and develop our existing staff. This is particularly important across sectors with known skills shortages, such as engineering, utilities and construction. 

    We have broadened our apprenticeship programme and extended opportunities for entry level talent through graduate recruitment, internships and work experience. 

    We know that a diverse and inclusive workforce benefits our work environment. Although our gender pay difference is significantly lower than the UK average (ONS figure), we are committed to ensuring a better gender distribution across our workforce through:

    • a review of our recruitment strategy
    • pay benchmarking
    • job evaluations
    • a benefits benchmarking exercise. 

    For future employees, we are working with local schools and colleges to encourage applicants from different genders, ethnicity, levels and abilities. 

    Financial performance

    Our results for the half year show that operating profit increased by £6.6m from £118.8m to £125.4m, while profit after taxation decreased by £16.8m from £86.1m to £69.3m.

    Total turnover increased by £6.3m from £266.8m to £273.1m. Regulated tariff turnover rose by £6.5m, an increase due to the price rise allowed by Ofwat, combined with the decrease from customers switching to meters. Price rises were 3.4% for household customers and 2.6% for wholesale charges to retailers for non-household customers.

    Operational costs (excluding depreciation and amortisation) increased by £3.4m from £95.9m to £99.3m. There were upward pressures on costs due to general inflation, new obligations, power costs, and new connections. The savings that partially offset these increases were energy consumption initiatives, repairs and reduced business rates.

    Depreciation and amortisation decreased by £3.7m from £52.1m to £48.4m. The principal reason for the decrease was the disposal of the non-household customer book to Water2Business for £5.0m. This item apart, there was a small increase in depreciation from assets depreciated for the first time.

    Net interest payable increased by £4.3m from £36.5m to £40.8m. Interest payable increased by £4.0m, because of an increase in net debt between the half years and an increase in the average cost of debt from 3.7% to 4.1%. There was a £0.1m increase in the interest costs relating to IAS 19 pension accounting whilst interest receivable was £0.2m less than last year. 

    Total taxation, including deferred tax, moved from a £3.8m credit last year to a £15.3m charge this year. The corporation tax rate was 19% this year compared with 20% last year, and the mainstream corporation tax charge decreased to £11.6m this year from £12.2m last year. Deferred tax moved from a £16.0m credit last year to a £3.7m charge this year.   

    Deferred tax was a credit last year because of the rate reduction from 18% to 17% (with effect from 1st April 2020), which was recognised in full in the half-year results. This year, with no rate change, deferred tax has returned to a charge as it is in a normal year. 

    Dividends declared for the six months to 30 September 2017 were £50.0m, a decrease from £52.0m for the same period last year, with the final dividend relating to the previous year reducing by £2.0m.  

    Gross capital investment for the six months was £97.1m, an increase over £93.3m last year as the capital expenditure programme increases in the third year of the regulatory period.

    Net debt increased by £13.2m from £1,903.6m to £1,916.8m in the six months to 30 September 2017. The net cash inflow from operating activities was £173.8m less net capital investment of £86.4m, less interest payments of £30.7m, less tax payments of £13.3m, less dividend payments of £50.0m less working capital and bond accrual outflow of £6.6m. 

    Liquidity at 30 September 2017 was £243.9m comprising cash and bank balances of £93.9m and £150.0m of undrawn bank facilities. 

    Corporate resilience

    We work hard to ensure we are able to avoid, cope with and recover from any disruption to our business operations by having a simple organisational structure with clear reporting lines and accountabilities at both the regulated business level and the group level.  This means our board is able to provide robust independent challenge, focused on areas that matter most to customers and stakeholders.

    Full details of our governance procedures and processes are available in our annual report and accounts document, which can be found on our website.  In summary, the board annually reviews and approves the company’s organisation and control arrangements (O&CA) which set out the framework for control of our affairs.  The O&CA also specify requirements for the competency of members of the board and its committees, for effective management of the company and for the granting of delegated powers and authorisations.  

    The principal duties of the board, the matters reserved for its decision and the terms of reference of its committees are fully documented and copies are available on our website.  Matters reserved to the board include strategy, charges, material changes to the company’s management and control structure, board appointments, approval of material contracts, oversight of information provided to Ofwat, risk management, health and safety policies, disposal of material assets, approval of the annual operating budgets, employee pension arrangements, significant changes in accounting policies and defence and settlement of material litigation. 

    We regularly assess our risks, both in terms of business-wide risks (including operational and financial) and corporate specific risks.  These risks form the corporate risk register, maintained by a risk group comprising senior managers from throughout the business. 

    The risk group reviews all business risks, including emerging and strategic risks and all risks are assessed by experts responsible for the relevant part of the business. Where a high scoring risk is identified, the risk group considers additional measures to reduce its impact to an acceptable level. The risk group meets through the year and submits the current corporate risk register and summary report to a risk management advisory group comprising the executive directors and key senior managers, twice a year. Any significant new risks are reported to the advisory group as they arise.

    The advisory group scrutinises and challenges the risks included within the register and requires additional work where necessary to better classify the risk or explore alternative mitigation methods.

    The Managing Director submits a bi-annual risk review paper to the Board for its consideration and approval. This paper sets out the risk review process and identifies the current principal risks to the business and the mitigation measures in place. It also records the status of emergent risks that have been identified and provides details for the board of any changes in the National Risk Register (NRR) and the National Resilience Planning Assumptions (NRPAs).

    Our approach to assurance is set out in our regulatory assurance manual, which is updated annually and is available on our website.  As part of our annual review, the board signs a risk and compliance statement, ensuring that we have the appropriate systems and processes in place to make us resilient to risks that arise. 

    We have recently published our information risks, strengths and weaknesses statement on our website.  It notes that we have made good progress on all the risks identified last year and identifies our key risks as the forthcoming price control (PR19) and ensuring that we continue our work to identify and support vulnerable customers.  We have clear plans in place to mitigate these risks and work has already begun to deliver them.

    Resilience continues to form part of our business as usual activities but the expectations of stakeholders and customers continue to grow. To provide further assurance we have developed a resilience maturity assessment that evaluates our performance against the principles of BS 65000: Guidance on organisational resilience. This has resulted in short and medium-term targets that we are developing into specific resilience action plans and reporting through the risk group. The assessment is carried out annually along with independent assurance from external auditors.

    Performance

    Since April 2015, our five-year and long-term plans have been organised around the following outcomes, identified as the highest priorities by customers. Within these outcomes are a series of measures or performance commitments with relevant targets set over the five years. 

      Interim results 2017 outcomes diagram

    Overall, we continue to make good progress against our performance commitments and the outcomes we set out in our business plan as shown in the table below. 

    We have made improvements in customer satisfaction, water saved through water efficiency initiatives, the number of customer contacts about water quality, leakage and significant leaks fixed within a day.  We have progressed some of our environmental measures around land assessed to contain species or habitats of biodiversity importance and appropriate management, and combined sewer overflow monitoring to help prevent risks of serious spills.

    Despite improving significantly since 2014, our performance on supply interruptions compared to 2016 is worse for the first six months of the year – this is due to a single large and very difficult trunk main failure in September.  The target is very challenging for us given our rural nature with many villages supplied from a single pipe. However, we are committed to driving down supply interruptions to the lowest possible level, using the latest technology and techniques to get the supplies restored as quickly as possible. 

    Despite improving significantly since 2014, our performance on supply interruptions compared to 2016 is worse for the first six months of the year – this is due to a single large and very difficult trunk main failure in September.  The target is very challenging for us given our rural nature with many villages supplied from a single pipe. However, we are committed to driving down supply interruptions to the lowest possible level, using the latest technology and techniques to get the supplies restored as quickly as possible. 

      Units Actual 2016-2017 First half 2016-2017 First half 2017-2018 Target 2017-2018
    Excellent service for customers
    SIM overall service score (higher is better) Score 88 88 87 >86
    Customers rating service - good/very good % 96% 94% 96% >95%
    Affordable bills
    Water saved by water efficiency promotion l/person/day 1.56 1.04 1.94 1.92
    Highest quality drinking water
    Compliance with drinking water standards* % 99.95% 99.97% 99.97% 100%
    Customer contacts about water quality* Nr 2172 1058 991 1608
    Reduced leakage
    Volume of water leaked Ml/day 68 69 65 67.9
    Reported significant leaks fixed within a day % 70% 69% 73% 75%
    Resilient services
    Restrictions on water use (hosepipe bans) Nr 0 0 0 0
    Supply interruptions >3 hours Avg mins/property 12.8 6.0 11.1 12.0
    Water mains bursts Nr 1863 832 912 Less than 1993
    Collapses and bursts on sewer network Nr 264 144 137 Less than 300
    River, lakes and estuaries protected
    Compliance with EA abstraction licences* % 100.0% 100.0% 100.0% 100.0%
    Abstractions at Mere exported Ml/annum 341 38 22 100
    Land actively assessed and managed for biodiversity % 71% 63% 81% 80%
    Number of pollution incidents* Nr 96 36 58 ***
    Monitoring CSOs % 50% 46% 61% 43%
    Sewage treatment works compliant with discharge permits* % 99.4% 100.0% 99.4% ***
    Sewage sludge disposed satisfactorily* % 100% 100% 100% ***
    Improved bathing waters
    Beaches passing EU standards** % 98% 98% 96% 100%
    Sewage flooding minimised
    Internal flooding incidents per 10k properties 1.20 0.52 0.46 1.70
    Risk of flooding from hydraulic inadequacy Risk 51125 50289 51212 50651
    Reduced carbon footprint
    Greenhouse gas emissions ktCO2e 123 59 58 122
    Proportion of energy self-generated % 29% 29% 26% 22%

    * These are calendar year measures and so the half-yearly performance shown is as at the end of June 2017
    ** The bathing water season runs from May to September each year
    *** These measures form part of the Environmental Performance Assessment (EPA) which has a target of Industry Leading

    Note: the water efficiency savings are cumulative for the AMP period to date. 

    Customers and communities

    Excellent service for customers

    Excellent customer service is one of our key outcomes and we put customers at the heart of everything we do.

    We do not simply want to be the best for customer service in the water sector; we want customers to regard our service as highly as the service they receive from the top household names.

    We have focused on delivering this through both continuous improvement and our Customer Excellence Programme.  

    We are a member of the Institute of Customer Service and in this summer’s UKCSI survey we moved to third place in the utility sector and only a few points away from the top 50 overall.  We have also received the institute’s ServiceMark with Distinction for our operational contact centre, one of only 10 companies in the country to hold this accreditation.

    Moreover, we continue to be a top performer on the Service Incentive Mechanism for customer satisfaction with improvements to our customer effort and net promoter scores.

    We engage on a day-to-day basis with our customers through a variety of channels and in any one year we talk to around 60,000 customers as part of this routine engagement – their voice makes a difference to the services we offer and the communications we provide.   

    Our real-time feedback tool provides invaluable insight into areas where we can do better or where we do well to meet the increasing expectations of our customers.  Our continuous improvement group uses this information, under the guidance of our customer experience group comprising senior managers from across the business.

    Insight shows that our high performance on satisfaction and ease of resolution measures are due to our prompt, warm voice telephone answering, wide choice of communication channels, quick response times, first-time resolution of problems and keeping customers informed of what we are doing at all times. 

    As part of our Customer Excellence Programme we are installing a new customer relationship management system and a digital job tracker. These allow customers to track the progress towards resolution of their contact online, similar to the delivery of a parcel, as well as improving our e-billing service.  The number of customers signing up to our e-billing service grows each year.

    We continue to make wider use of proactive text messaging and social media posting during operational problems such as burst water mains, and are extending the opportunities for customers to send photographs during operational work, helping us shorten our diagnosis and repair times.  

    Our alternative digital contact channels, such as Live Chat, texting and online self-service, are increasing in popularity and we are constantly improving the customer experience in this area.

    We have introduced information graphics on metered customers’ bills to help them to compare their water use over time and are planning to take this a step further.  We are completely redesigning the bills and intend to launch the new look version in February 2018 after consultation with our customers.

    This year we have asked the views of our online ‘Have your say’ customer panel on the amenity use of our reservoirs and their attitudes to water use.

    Following the success of the Young People’s Panel we launched last year, we have now launched the panel for 2017.  Last year our customers of the future helped us design our new cash back guarantee for meter options and this year the 23 students are focusing on the real business problem of sewer misuse.  They are helping us design ways of encouraging younger people to care about the waste system in order to build resilience for future generations. 

    We are fully committed to making our service inclusive and accessible to all customers and this is particularly important if a customer becomes vulnerable, which can happen at any time. Our approach to customer service and customer care, coupled with the support schemes we offer customers in financial difficulty or who have specific additional needs such as a disability, has enabled us to retain the British Standard for Inclusive Services for another year, one of our performance commitments.  

    Our new look vulnerability strategy has been reviewed and endorsed by around 22 customer organisations so far.

    The number of customers on our Priority Services scheme is increasing and we are embarking on a number of pilot projects with energy companies to share data.  This will ensure customers who need to be registered for Priority Services only need do it with one utility.  We are playing an active part in the wider work to introduce data sharing at a national level by 2020.

    We have retained our government Customer Service Excellence award and ‘Louder than Words’ charter and hold the best practice mark for our continuing support for the Keep Me Posted campaign. 

    The year we launched a variety of training modules to help staff support customers, including an innovative mental health video.  

    As part of engagement for our business plan, we have talked to customers about the balance between service and price, our leakage offering and resilience or future proofing of water services.  

    Our new innovative business plan game went live in late October and this digital game will be available to customers on our website as well as out in the community at our business plan roadshows. 

    Affordable bills

    One of our key outcomes is to ensure bills are affordable for all.  We remain committed to tackling this issue and growing the support we offer customers in financial difficulty through our tap programme.

    Tap offers customers tailored solutions to their affordability problems via a range of schemes and low rate tariffs to help them afford their ongoing charges and repay their debts, along with practical help to reduce their water and energy use. 

    We provide this support through long standing and very effective partnerships with the debt advice sector, either face to face, telephone or online providers.

    Under the guidance of our expert affordability advisory group, and by using our affordability action plan, the number of customers supported through our programme has increased once more and there are now around 32,000 benefiting from tap, 28,000 receiving lower bills.

    Our network of advice partners is constantly expanding and we will soon launch our online partner hub, designed to make engagement with us even easier.  The hub will allow our partners to obtain information on the support we offer, request resources and application forms, apply for schemes on behalf of their clients, advertise and request our attendance at community events and network with one another online.

    We continue to fund holistic debt advice and are funding 12 innovative community outreach projects in areas with high poverty where customers might find it harder to access help.

    We recently partnered with the Quartet Community Foundation to deliver our Money Matters awards, which are now in their fifth year.  Since Money Matters began, we have provided grants to 23 different organisations delivering financial capability and money management projects across our region. 

    Reduced leakage 

    We set ourselves a challenging five-year leakage reduction target for this asset management plan (AMP) period, down from 70Ml/d to 66.5Ml/d.  Last year we successfully achieved our 2016-17 leakage reduction target, finishing just below our target of 68.6Ml/d.  This year there has been a further reduction in leakage in the first six months of the year and we expect to meet our end of year 2017-18 leakage reduction target of 67.9Ml/d.

    Highest quality drinking water

    Mean zonal compliance with drinking water standards for January to September 2017 is stable in comparison to 2016-17. September was the third consecutive month with no recorded exceedances affecting the index. So far this year has been very positive, with only five exceedances affecting the index in the nine months to date. This compares extremely favourably to the 18 failures in the equivalent period last year.

    Four of the five exceedances were attributed to issues at the customer’s tap. The single exceedance attributed to our assets was a transient iron issue not repeated in any investigatory samples. 

    The DWI introduced a new flagship measure of compliance, Compliance Risk Index (CRI), in 2017. This measure calculates a risk score for each exceedance at water treatment works, service reservoirs and customer taps. Our predicted score for January to September 2017 is 1.22, which takes into account a total of 12 exceedances – leading performance in the industry.

    Investment in water treatment to combat deteriorating raw water quality continues to focus on more sustainable solutions, including our innovative strategy of catchment management.  Our catchment specialists are working alongside local farmers to identify potential pollutant pathways and find alternative management practices that protect and improve raw water quality.

    Our programme includes long-term initiatives with farmers, aimed at reducing levels of nitrates and pesticides.  In the Durleigh catchment, near Bridgwater, this approach has enabled us to avoid exceedances of metaldehyde, the active ingredient of slug pellets, for more than five years. 

    Construction and commissioning of major water treatment plan upgrades has finished at Hooke, a spring source near Dorchester, and at Black Lane, the main sources for Blandford Forum.

    Sewage flooding minimised

    Our programme to reduce flooding is ongoing with 10 schemes currently under construction, including a multimillion pound scheme in Brent Knoll to reduce risk at 31 properties due for completion in November 2017. 

    Until these schemes are complete, we cannot reduce the reported risk score, which has increased slightly because some additional properties were added to the risk grid. By the end of the year we aim to have the risk score below our target level.

    Construction of our North Bristol Frome Valley relief strategy sewer (phase 3) is progressing well. The generally mild weather conditions mean the completion date is forecast for October 2018, significantly ahead of the target date of March 2019. 

    We continue to work with local authorities to identify partnership working opportunities and joint funded schemes for efficient delivery. We partly funded an Environment Agency scheme that was officially opened at Cannington by the chair of the Wessex Regional Flood and Coastal Committee.

    We are supporting long term sewerage planning and other ambitious activities promoted by the 21st Century Drainage Programme.

    Education and community involvement

    We took our Make Every Drop Matter campaign on the road this summer, visiting shows and events to give advice to customers about saving water in the home and garden.

    Our mobile vehicle and stand highlighted some of the UK's favourite water efficient plants alongside quizzes and activities. The team visited Yeovilton Air Day, Chippenham, Taunton and Poole, and finished at the Great Dorset Steam Fair.

    Over the last few months we have made numerous Watermark awards, including one to the Friends of Bentley Wood in Wiltshire. We helped with an award towards conservation at the 1,800-acre nature reserve and working wood, one of the few remnants of the ancient Clarendon Royal Hunting Forest.

    Our education advisers continued to visit students of all ages and community groups across Bristol, Bath, Somerset, Wiltshire, South Gloucestershire and Dorset. Teaching topics ranging from the water cycle to what happens to waste once it has been flushed down the toilet.

    Behavioural engagement

    Our work to deliver behavioural change through better communication and advice to customers continues. In 2017, we applied behavioural techniques to the way we write our promotional material encouraging customers to opt for a meter and use water efficient devices and practices at home.  

    Our social media and letter campaigns have been repeatedly refined as our understanding of how we can best communicate with our customers improves through testing.  We intend to expand this approach into other areas of the business, such as water quality, where we will aim to influence customer behaviours that affect our ability to meet performance commitments.

    Another area of interest we have been developing this year is the relationship our customers have with their local water system and services and the value they place on it.  By working with the New Citizenship Project we are increasing our knowledge and expertise in this field.  

    In July, we launched a video to raise awareness of the links between water, the environment and our daily lives, and the importance of protection and conservation to protect and conserve them. Later this year we will launch a trial to explore how we can work with staff and partner organisations to improve customer and community awareness of their local water system.  

    Meeting new demands

    We maintained water supply without restriction across our region last summer for the 41st year in succession.

    An important part of managing our supply capacity has been our attention to reducing leakage across our 11,800 km of mains. We are proud, but not complacent, of our record and have met our target every year.     

    Supporting customers to reduce their water use is a particularly important area for us.  In the first six months of the year, more than 2,400 customers applied for a meter and over 3,100 have been metered through our change of occupier metering policy. 

    Last year’s Young People’s Panel generated the concept of a cash back guarantee to encourage customers to opt for a meter – we have been developing processes to support the initiative and it will be launched this autumn.  Furthermore, we are investigating ways of improving the efficient delivery of meter installations and will shortly begin a by-street installation and targeted promotion.    

    Our water efficiency services continue to offer more active engagement – including practical assistance in the home.  In the first half of the year we delivered our Home Check service to 5,200 households, taking the total to more than 10,000 since the service was launched just 12 months ago.  

    Technicians provide water and energy efficient device installations and bespoke behavioural advice to customers. Each visit leads to savings of approximately 50 litres per household per day and has been very well received by customers (average SIM equivalent score of 4.9 out of 5).  

    Other water efficiency work continues, including advice and information, a schools education service and a free water efficiency pack. We advertise the pack regularly on social media and there is a coupon for it in our autumn magazine. Customers have requested nearly 2,000 packs and more than 5,700 devices so far this year.

    To date we have achieved nearly 60% of the savings required by March 2020 to meet our performance commitment, equivalent to 1.94 litres per head per day.

    Environment

    Improved bathing waters

    Two of the 48 bathing waters in our region were classed as ‘poor’ this summer: Burnham Jetty and Uphill – both on the Severn estuary. Burnham has been in ‘poor’ condition since 2015. We are nearing completion of investment totalling £38m to contribute towards improving Burnham’s bathing water quality. A significant scheme at Bristol Road, Bridgwater, has just been completed which will reduce the spill frequency from 20 times a bathing season to just once. This scheme involved an innovative design by constructing 3,000m3 of storage under a new pumping station. The classification of Uphill beach has been borderline failing for a number of years due largely to run-off in the catchment during rainfall events.  

    All schemes are on track for delivery before their regulatory completion date. For example, our construction work at our Combwich and Cannington STWs is on schedule to meet the required improvements by March 2018. 

    We will continue working with the Environment Agency, local council, agricultural community and other stakeholders to bring the beach back to passing the required standards. This includes the collaborative Litter Free Coast and Sea Project, working with organisations, businesses and communities in the last mile flowing to the sea to identify risks from waste, misconnections, littering, dog fouling and behaviours to improve the quality of the beaches.

    We are installing event duration monitoring equipment at combined sewer overflows (CSOs) throughout our region. We have monitors at more than 60% of our overflows that could affect the environment.

    Rivers, lakes and estuaries protected

    Providing environmental improvements to rivers and lakes in our region through enhancements at our sewage treatment works will form a large part of our programme over the next four years. 

    The number of pollutions from the sewerage system we operate has increased from last year and three have been classed as significant. The majority of pollutions still arise from blockages in the network and we are increasing our efforts to encourage customers to stop thinking of their toilets as waste bins. We support national water industry work with retailers and manufacturers of products which are commonly flushed, urging them to improve their ‘Do not flush’ labelling. 

    Our effluent and sludge treatment compliance remains good and we are forecasting an end of year position of ‘Above average’ in the Environment Agency’s Environmental Performance Assessment.

    During the first six months of this year we carried out construction of five schemes to improve levels of ammoniacal nitrogen discharged from our STWs at Chard, Glastonbury, Grittleton, Wanstrow and Kilmersdon. The objective is to avoid any deterioration to river water quality due to development in the STW catchments.  

    We have also made significant progress on our programme of work for improved phosphorus removal, to meet the Urban Wastewater and Water Framework Directive water quality objectives. 

    Construction work has started at our STWs at Calne, Chilcompton, RAF Lyneham, Royal Wootton Bassett, and Wellington. Design work is progressing well on a further 23 phosphorus removal schemes which are all on programme for completion later in this AMP. 

    There are two schemes where we have been working with the Environment Agency and others to promote more sustainable solutions for removing phosphorus from our water-courses. These are Brinkworth Brook, where a catchment management approach is being promoted, and Cromhall where constructed wetlands have been proposed instead of chemical dosing.

    We have also been working with the Environment Agency to complete development of an innovative catchment permitting process to apply to phosphorus removal projects across the Bristol Avon river catchment area. Work has begun on optimising the performance of 13 STWs where the phosphorus consent was tightened from 1 January 2017.  To date, we have reduced an additional 10 tonnes/year phosphorus above the target set for this calendar year.

    The National Environment Programme also includes a series of phosphorus technology trials. Under this programme we have been working with the University of Bath to complete a 12 month trial of an innovative high rate algal pond for the removal of phosphorus from sewage effluent at our Beckington STW.

    Following the successful trial of our online auction platform, EnTrade, in 2016, it is now part of our nutrient removal strategy. Based on the results so far we estimate that EnTrade can provide an auditable source of nitrate reductions for a quarter of the cost of an equivalent asset solution at a sewage works.

    We host the Bristol Avon and Dorset Catchment Partnerships and these partnerships have secured funding to deliver a number of projects to increase the wider environmental resilience of these catchments.

    For example, the Piddle Valley Natural Flood Management project secured funding from Defra to reduce flooding of roads and trackways from the surrounding countryside.  Other collaborative projects across the catchments are to address water quality, biodiversity and flooding challenges by enhancing the ability of the environment to respond and adapt.

    Operational resilience

    Our integrated water supply grid project is a good example of our approach to providing resilient service. We celebrated the official opening of the grid at Sturminster Marshall pumping station, near Poole, in September 2017.  Our board, local interest groups, parish councils, the planning authorities and regulators attended it.  

    In addition to highlighting the grid’s advanced engineering, it was an opportunity to demonstrate the innovative central control system, which allows us to maintain security of supply to customers at the same time as optimising the use of sources and pumping.  The grid project and its control system, called the optimiser, has won several industry awards during the year.

    Biodiversity

    We own or lease nearly 2,950 hectares of land, which includes operational sites, tenanted agricultural land, nature reserves and amenity, or recreational land. We have a duty, under the Water Industry and Natural Environment and Rural Communities Acts, to conserve and enhance biodiversity on this landholding.

    Our performance commitment in AMP6 is to assess 100% of our landholding for biodiversity, with a view to bringing as much as feasible into appropriate management. To date, 81% has been assessed in line with this year’s KPI target.

    We have maintained our high levels of compliance with the Defra target, with more than 99.5% of nearly 300ha of Sites of Special Scientific Interest (SSSIs) in favourable or recovering condition, of which 62.5% are in favourable condition.  Future SSSI management work will focus on increasing the area in favourable condition.

    Phase 5 of our Partners Programme began in April 2015, running for the duration of the AMP until March 2020. This programme supports external organisations across our region to conserve and enhance biodiversity outside our own landholding and to deliver biodiversity gain in line with our core functions.  The projects focus on three themes, including science and research, partnership working and catchment scale delivery.

    The four flagship projects we are funding are:

    • Wessex Chalk Streams Project – Wiltshire Wildlife Trust
    • Dorset Wild Rivers – Dorset Wildlife Trust
    • Floodplain and Coastal Grazing Marsh – Avon Wildlife Trust
    • South Wiltshire Farmland Bird Conservation – Cranborne Chase Area of Outstanding Natural Beauty.

    Managing our abstractions

    Our performance commitment to minimise exports from groundwater source at Mere when river flows are low, has been working well in 2017. To the end of September, around 22 million litres of water were exported – less than 5% of what could have been exported if we had followed the abstraction licence without the abstraction incentive mechanism in place.

    Waste management

    We diverted 98% of all non-sludge waste from landfill for the first six months of the year.  The only remaining ones now sent to landfill are contaminated wastes and a small amount of general waste. We continue to explore recycling routes for these remaining materials to move towards a 100% landfill diversion rate.

    Reduced carbon footprint

    All sludge generated from the sewage treatment process is disposed of safely and in a way that meets mandatory standards. Around two thirds of our sludge is treated using the anaerobic digestion process which reduces the volume for recycling while generating renewable energy, reducing our costs and carbon footprint. 

    We have a performance commitment to increase the proportion of self-generated energy and are investing in upgrades to our sludge digestion facilities to increase the proportion of sludge we digest. This includes the installation of advanced anaerobic digestion at Trowbridge and Taunton and additional digestion capacity at Berry Hill, Bournemouth. 

    During April to September 2017, our renewable energy generation was equivalent to 26% of total electricity use, and our operational carbon footprint was estimated at 58 kilotonnes carbon dioxide equivalent, which is on track to be within the annual performance commitment of 122 kilotonnes.

    Innovation

    In June, we won the ‘Innovation of the year’ award at the Institute of Water’s annual UK awards. The award recognised our work on integrated catchment management, combining the development of the Bristol Avon catchment permitting trial and EnTrade – our online auction for reducing nitrate leach from farming around Poole Harbour.

    In the same week, our renewable energy company GENeco won the sustainability category at the 2017 British Renewable Energy awards for its composting services.

    We recently held our first innovation day at our operations centre. The day involved two parallel sessions showcasing current innovation work and aspects where we are likely to see significant change in future, as well as demonstrations, practical sessions and stands. 

    To assist in embedding innovation in all aspects of our business, the main presentations were available for viewing live by employees in any location and remain available for them to download. As well as speakers from our group of companies, we heard talks by guests from external organisations including Microsoft, PwC, Vodafone and the University of Bath.

    Employees

    Apprenticeships, talent and skills attraction

    We continue to develop and strengthen our apprenticeship programmes and following school engagement, we have increased the number of apprenticeship applicants during a period when the number of young people entering the workforce is falling and the competition for apprenticeships is increasing. 

    This year we broadened our apprenticeship programmes into new areas including human resources, business administration, logistics and scheduling, public relations and data management. 

    Following the introduction of the Apprenticeship Levy earlier this year, a government reform which ring-fences funding for training through apprenticeships, and the appointment of a graduate adviser, we have seen an increase of 120% in the applications for university level apprenticeships, which we aim to feed into our graduate development and talent programmes. 

    We offer higher-level apprenticeships in electronic engineering, public relations, quantity surveying, construction management and cyber security. We are currently exploring university level partnerships to offer a senior leader apprenticeship with an embedded MBA. We are also using the Apprenticeship Levy to support career development of existing staff through higher level and degree level apprenticeships.

    Developing and growing talent remains a priority for us as we face a challenging future in respect to the attraction of relevant skills. We are developing opportunities for entry level talent through graduate recruitment, internships and work experience. In addition, we are keen to ensure we are able to develop a diverse and inclusive workforce. We are working with local schools and colleges to encourage applicants from different genders, ethnicity, levels and abilities.

    Our apprenticeship programmes have received recognition this year with three finalists in the Bristol and Bath regional apprenticeship awards. We received the Apprenticeship Development Award for our work across the business and IS apprentice, Cameron Wallace, won his category of Financial and Business Services Apprentice of the Year, and was awarded overall Outstanding Apprentice of Bristol and Bath.  

    Diversity and inclusion

    We value the differences that a diverse workforce brings and are committed to creating and promoting an inclusive workplace for employees and others who work with the company as suppliers, contractors or customers. 

    From April 2017, all organisations that employ 250 or more employees are required to report the pay gap between male and female employees. The gender pay gap is defined as the difference in the average earnings between men and women calculated over a specified period.

    Gender distribution chart 2017 

    Gender pay gap report

    The following information represents our gender pay gap figures as at April 2017. 

    Gender pay gap   WWSL  ONS average (2016)
    Mean gender pay gap in hourly pay   7.3% 17.5%
    Median gender pay gap in hourly pay  4.4% 18.2%
    Mean bonus gender pay gap in hourly pay  14.8% -
    Median bonus gender pay gap       3.9% -
    Proportion of males paid a bonus  67.3% -
    Proportion of females paid a bonus   53.6% -

     Mean is the average, median represents the mid-point of the data

    Pay quartiles by gender

    Female Male Total
    Lower quartile

    147

    (27.0%)

    397

    (73.0%)

    544
    Lower middle quartile

    104

    (19.1%)

    440

    (80.9%)

    544
    Upper middle quartile

    103

    (18.9%)

    441

    (81.1%)

    544
    Upper quartile

    101

    (18.5%)

    444

    (81.5%)

    545
    Total 455 1,722 2,177  

    Our gender pay differences are significantly lower than the UK average (ONS figures) and reflect distribution by gender in job role. 

    The average rate of pay and bonus paid to men is higher on average than to women given that 82% of employees in leadership roles are men. 

    While our workforce, both general and those in leadership roles is heavily male dominated, this is commonplace within the utilities industry. During the year to April 2017, the number of females in leadership roles increased by 2%.

    We remain committed to ensuring a better gender distribution across our workforce, particularly at a senior level. Diversity continues to be a key strategic focus and our aim is to replicate the community we serve. 

    In the last 12 months, we have:

    • reviewed our recruitment strategy, ensuring a transparent recruitment process and equal opportunities for internal and external candidates at all levels with vacant roles being advertised as part time and able to work flexibly, where it is operationally feasible
    • conducted pay benchmarking to ensure staff are paid in line with our chosen markets
    • completed job evaluations in line with our recognised framework ensuring roles are sized using a consistent process and remunerated fairly
    • we are undertaking a benefits benchmarking exercise and moving to an online benefits platform, which provides our staff with the flexibility to choose the benefits which best suits them within their total reward package 
    • continued to work closely with schools in our region in an effort to promote and encourage careers within our industry
    • continued to develop and grow our apprentice programmes and drive for more female apprentices. Across technical apprenticeships we have an 11% female ratio which is considerably higher than the national benchmark
    • continued to further embed a positive approach to diversity and inclusion. This year we have introduced equality and diversity awareness training for all technical apprentices
    • continued to promote our volunteering policy, encouraging staff to volunteer in our community
    • continued to promote flexible and remote working together with flexible retirement aimed at providing the option of a more gradual transition .

    Health and safety

    As a responsible employer, the health, safety and welfare of our staff, and the people with whom we interact as we carry out our activities, is paramount.  We continue to develop and embed a positive health, safety and welfare culture in our day-to-day operations that targets zero accidents and supports our aim to be a great place to work in which all employees can work safely and reach their full potential.

    Safety performance in 2017 for incidents reportable under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) is currently within our target. However, we must not become complacent and we need to ensure we promote continual improvement.  We monitor all incidents and near misses reported by employees and, in particular:

    • the annual numbers of total and reportable incidents and near misses
    • the areas of the company from which these arise
    • the proportion of these that fall under each RIDDOR accident category
    • days lost as a result of reportable incidents.

     This information assists in determining problem areas and allows us to allocate resources to ensure that the situation does not escalate.

    As part of our drive to improve behavioural safety, Take 5 to Check 5 (T5C5) was introduced at the staff seminars in April 2017 with all staff attending receiving an introduction to the process and booklet to take away.  

    T5C5 is a dynamic risk assessment process that staff can use to challenge themselves and others, ensure they make the right choice and ensure that it is safe to start work.  This simple approach to managing risk is equally applicable at work and at home.

    To improve awareness and safety at roadworks, we joined with the charity SafeWise which has centres at Weymouth, Bournemouth and Devizes.  The charity works with schools and young people to educate them about the risks in the home and on the roads, using full-scale street scenes.  

    Staff from Engineering and Construction were involved with the charity and, in particular, with a focus group involving disabled charities that identified safety improvements for pedestrians around roadworks.  

    To tackle speeding issues at roadworks we produced a video designed to slow drivers passing roadworks.  It is being used at driver awareness sessions run by Dorset and Wiltshire Police for people who have been detected committing a road traffic offence.

    In 2017, we developed a mobile health and safety incident and observation reporting app. It is designed to allow staff to easily report incidents, near misses and observations (good and bad) without undue delay.  The app went live in September 2017 following extensive development and user acceptance testing. A phased roll out will take place across the company with a view to replacing existing paper based systems.  

    We will monitor usage and, where appropriate, issue updates that further enhance user experience and help to improve our safety culture.  The app will allow us to discover the root cause of incidents at an early stage and ensure that trends are identified and necessary action taken where appropriate.

    Our commitment to safety and performance has again been recognised by RoSPA with Engineering and Construction awarded the 2017 construction sector award and shortlisted for the prestigious Sir George Earle trophy that we won in 2016. 

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