Big question

BQ9 - How do we ensure that the regulatory framework incentivises efficient delivery of the right outcomes for customers and the environment?



We are currently working on the approach to answering this Big Question, and more information will be given here soon.

The areas that this Big Question covers includes:

  • Finding new ways of involving customers in our business planning process
  • Ensuring the costs and benefits of service and environmental improvements are appropriately assessed

Once we understand where the gaps are, we will produce a route map – this is a plan as to how we will answer our Big Question.

The route map will have a number of key elements. At the top will be our Big Question and then we will look to see what Outcomes we need from the research programme -if we can achieve all these outcomes we can answer the Big Question. This is the stage we are currently at for this Big Question.

The next stage will be to think about the key benefits we want the research projects to deliver to meet these outcomes.

Following this, we will plan the research projects to help deliver the benefits.

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Enhancing equality, diversity and inclusion in the UK Water Industry.

Project Status - Project Commenced

Category - Programme Management

Lack of diversity in the UK & Irish water industry workforce means that we are missing out on the talent from multiple groups who are under-represented. UK & Irish water industry workforce currently does not reflect the wider society that we serve. As companies who serve the communities around is it is vital that we have representation from within of all the various groups that we serve. This will enable us to understand the challenges and issues that our customers face, as well as reasons why they might not be receptive to our messaging (e.g. reducing water use)

OFWAT expect all of the UK Water companies to be delviering on this; a quote taken from the OFWAT 'Time to Act Together' strategy says "We want to see water companies transform their ability to serve customers and respond to the full diversity of customer needs, particularly those in vulnerable circumstances." We can only do this if we have an embedded understanding of what those customers' needs are, and the best way to achieve that is through having a diverse workforce with a wide variety of lived experiences.

Limited diversity in thought means that we are missing out on innovation opportunities. There is plenty of research available that proves that a diverse workforce brings many business benefits, and is in the interests of all. Statistics gathered by McKinsey confirm that companies in the top-quartile for gender diversity on executive teams were 21% more likely to outperform on profitability, and companies in the top-quartile for ethnic/cultural diversity on executive teams were 33% more likely to have industry-leading profitability. Companies in the bottom quartile for both gender and ethnic/cultural diversity were 29% less likely to achieve above-average profitability. Further details can be found in the 2018 McKinsey report "Delivery through Diversity" which is available free of charge.

One of the pillars of the UK Water 2050 Strategy is 'Enabling Diverse Future-Ready People and Partnership Working' explained as "We need to ensure we have the culture, skills and partnerships to innovate to prepare for future change."

One of the specific short-term goals towards 2025 is "Training, upskilling, resource sharing, and employment development programmes support the creation of a diverse, representative and future ready workforce, which reflects are open to innovation and able to adapt to future challenges.

For example:
• through development programmes to ensure that diversity of thought, innovation skills and wider supporting skills, such as collaboration, digital, product develop and customer research, are key water sector skill-sets

The sector has a shared understanding of where future skills gaps could emerge and sector wide plans and training programmes to address any gaps identified"


Extending SAGIS to include catchment statistics analysis and reporting in preparation for PR24.

Project Status - Project Commenced

What is the emerging legislation or other threat that lies behind the proposal?

DEFRA and the regulators are reviewing the way in which sector share of pollution is derived. The review is to complete in the Autumn. The sector share allocation approach (whether revised or as for PR19) needs to be embedded in SAGIS for catchment work.

Regulators, encouraged by Government (DEFRA in England) are increasingly managing the water environment at catchment scale. In England and Wales catchments mean operational catchments. These have been identified by the regulators and are reasonably homogenous, thereby making it easier to identify the non-water industry sector impacts. (There are over 300 such catchments in England).

The SAGIS-SIMCAT system was first used in PR14 and more extensively in PR19, where several billion pounds of investment were based on calculations provided by it. Indirect benefits include a consistent approach across the water Industry for environmental planning and closer, cooperative working with the regulators.

The purpose of this proposal is to develop the facilities for catchment scale calculations, analysis and reporting, in preparation for PR24.

Why is the Industry concerned about this issue?

Water Industry environmental obligations for PR24 will be contingent on sector share allocation, at catchment scale.

The absence of the means to compute this Water Industry share could result on undue obligations and hence costs being placed on the Industry.

This will support the development of PR24 measures, and allow us to better explore catchment solution options.

The specific problem is:

  • To have catchment scale information in a reliable and accessible form to support the PR24 process.

We note that:

  • SAGIS-SIMCAT already provides some of the tools needed for catchment scale work. These include the Decision Support Tool and the Environment Agency optimiser.  

The missing parts, to be provided by this project, are:

  • Specification of operational catchments within SAGIS and SIMCAT
  • Summary statistics for catchments
  • Sector share of EQS

Summary statistics are the usual mean, standard deviation and percentile concentrations. These are to be provided on a sector by sector basis, thereby providing a clear picture of each sector’s contributions. These statistics will also allow better inter-catchment comparisons. Sector share is derived from these summary statistics. (The details of the sector share derivation will need to be consistent with PR24 guidance, following the DEFRA review.)


PFAS and wastewater - prevalence, reduction options and costs.

Project Status - Project Completed

The release of the film 'Dark Waters' has only served to highlight a wider concern than the known issue of widespread non-compliance with the EQS for PFOS. There is emerging concern regarding the wider family of PFAS and their toxicity both to humans and in the environment. The EA is currently taking a pragmatic view and effectively relaxing the EQS for PFOS in the light of monitoring data (aqueous and biota) but this leaves unanswered issues of what to regulate and why - and then how the industry should respond, and if compliance is cost-effective.


Scoping Study - Understanding Asset Risk (BQ8).

Project Status - Project Completed