We consult and plan for short, medium and long-term horizons

We deliver the outcomes set out in our regulatory contract

We create long-term value for a range of stakeholders

We review and measure our progress

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business model in full

We consult and plan for short, medium and long-term horizons

We provide essential water and wastewater services to millions of customers every day, and this relies on a variety of key resources. How we manage these is influenced by external drivers and relationships with a variety of stakeholders.

Consultation with customers and other stakeholders forms an integral part of our planning process across the short, medium and long term, and our work delivers a range of long-term benefits for many different stakeholder groups. This value creation feeds back into the continuous cycle of what we do.

Our external drivers and relationships

Political environment

  • We engage with regional and national politicians as well as policy makers, through regular meetings and conferences, in relation to areas such as our local investment schemes, our economic contribution to the North West, and key policy issues affecting the water industry.

Economic environment

  • We are impacted by market rate movements, such as interest rates and inflation, and seek to manage these prudently to reduce risk as far as practical. We operate in an area with high levels of extreme deprivation, so helping vulnerable customers is particularly important for us.

Regulatory environment

  • Sustainable business means preparing for future market reforms as well as meeting current regulatory commitments. We place great value on our relationships with economic, quality and environmental regulators, engaging actively and influencing where we can.

People

  • We rely on employees and suppliers to deliver our services to customers. We are committed to attracting, developing, training and motivating a diverse and skilled workforce. We build effective relationships and work with suppliers who share our values. We have management incentives based on performance and a long-term incentive plan.

Financing

  • Financing allows us to preserve intergenerational equity for customers while funding long-term capital investment. We maintain a robust capital structure with an appropriate level of gearing level and prudent risk management. We have long-term debt locked in at good relative value and maintain access to a range of markets. We proactively engage with equity and credit investors.

Stakeholders

  • Our work and the huge areas of land we manage puts us at the heart of communities in our region, and impacts a large variety of stakeholders. We build relationships and consult with them in developing and executing our plans.

Natural resources

  • We rely on natural sources of water that we collect for treatment, and manage large areas of catchment land in a sustainable way. We rely on watercourses where we return wastewater safely and cleanly to the environment, and we process bioresources from wastewater to generate renewable energy, which helps to reduce our carbon footprint and energy costs.

Assets

  • Our significant capital investment programme helps to grow our business while building resilience and maintaining and enhancing sustainable long-term assets. We use telemetry across the network to manage our assets as one integrated network from our Integrated Control Centre as part of our Systems Thinking approach.

Natural environment

  • The natural environment is constantly changing, and we must adapt and prepare for future impacts such as climate change and population growth. Our use and return of water to the environment is a continuous cycle, and returning water cleanly and safely, as well as managing our catchment land effectively, allows this cycle to begin again from the best starting point.

Technology and innovation

  • New technologies and innovative ideas present opportunities for us to make things faster, better, safer and cheaper. These can come from all over, which is why we encourage innovation externally and internally at all levels of the business, from our annual CEO Challenge and dedicated innovation team to our Innovation Lab.

Our key resources

We deliver the outcomes set out in our regulatory contract

What we do is set out in our regulatory contract, which details the price and service package we will deliver in each five-year period split out by price control areas – wholesale water, wholesale wastewater and household retail. The fourth price control, non-household retail, sits within our joint venture, Water Plus.

How we do it is set out in our strategic themes, and everything we do is underpinned by our values and culture, and our governance and risk management. Our pioneering Systems Thinking approach to operating our business is a competitive advantage.

How we operate

Read more about what is involved in the provision of wholesale and retail services in our water cycle

Our purpose is to provide great service to our customers and communities in the North West, creating long-term value for all of our stakeholders.

Our vision is to be the best UK water and wastewater company

Read more about our strategy, and more about our competitive advantages.

We review progress on outcomes we have promised to deliver for customers in the regulatory period, and we measure our performance against operational KPIs as well as financial measures.

These outcomes and KPIs fit within the framework of our three strategic themes.

Our outcomes and KPIs

The best service
to customers

Outcomes

  • Provide great water;
  • Dispose of wastewater; and
  • Deliver a service customers can rely on.

KPIs

  • Wholesale ODI composite;
  • SIM – qualitative; and
  • SIM – quantitative.

At the lowest
sustainable cost

Outcomes

  • Value for money; and
  • Improved efficiency.

KPIs

  • Totex outperformance;
  • Financing outperformance; and
  • Household retail cost to serve.

In a responsible
manner

Outcomes

  • Protect and enhance the environment;
  • Support local communities; and
  • Support employees in a safe workplace.

KPIs

  • Leakage;
  • EA performance assessment; and
  • Dow Jones Sustainability Index.

We create long-term value for a range of stakeholders

The work we do delivers a wide range of benefits to a variety of stakeholders, creating long-term sustainable value for many people.

Responsible business runs through everything we do, as evidenced by our business principles.

For shareholders

  • Many of our shareholders are pension funds and charities and the income that we provide is relied on by millions of people every day. We manage risk prudently and provide an appropriate return, investing in our assets for growth and sustainability

For customers

  • Through innovation and efficiency we provide a great service at a lower cost. We support thousands of vulnerable customers through a wide range of assistance schemes

For employees

  • We focus on attracting, developing and retaining a diverse workforce, and ensuring that we look after their health, safety and wellbeing. To help ensure the next generation of skilled employees, we run graduate and apprenticeship programmes

For the environment

  • We maintain and enhance reservoirs, catchment land, rivers and bathing waters that provide a home for wildlife, areas for recreation, and a major pull for tourism. We strive to reduce our environmental impact and generate renewable energy

For communities

  • We build partnerships and work with schools to develop skills and help people back to work. We encourage employee volunteering programmes to help create better places, stronger communities, and accomplish more to address local issues together

For suppliers

  • We invest in the North West's infrastructure and generate jobs, skills and income through our supply chain that supports the local economy. We treat all suppliers fairly and are a signatory to the Prompt Payment Code

We review and measure our progress