of 190
Pure know h 2 ow
2020 to 2025
Business Plan
Customer satisfaction
MINDFUL OPTIMISTS
LESS AFFLUENT, WITH
COMMUNITY VERSUS
CORPORATE FOCUS
GLOBAL ADVOCATES
AFFLUENT, FINANCIALLY
SECURE AND ENGAGED
IN THE BIG PICTURE
JUST ME AND MINE
COMFORTABLE AND WHOSE
MAIN FOCUS IS ON THEIR
IMMEDIATE WORLD
WE BELIEVE CUSTOMER SATISFACTION IS THE BEST YARDSTICK
FOR EVERY THING WE DO, WHICH IS WHY IT IS THE CORE THEME OF
THIS PL AN.
WE HAVE EVOLVED THE CONCEPT FURTHER AND IDENTIFIED THE RANGE
OF WATER AT TITUDES AND CHARACTERISTICS OUR CUSTOMERS HAVE.
responsibly delivered
CAREFUL NEIGHBOURS
KIND AND THOUGHTFUL ABOUT THEIR
COMMUNITY, FINANCIALLY CAREFUL
AND WASTE CONSCIOUS
BUSY JUGGLERS
TECH IMMERSED, WOULD BE
MORE OUTWARDLY FOCUSED
IF THEY HAD TIME
LIVING FOR TODAY
LOW SOCIAL CONSCIENCE
WITH SPONTANEOUS
NATURE
BY DOING THIS, WE HAVE UNDERSTOOD WHAT REALLY MAKES OUR
CUSTOMERS TICK - SO THAT WHOEVER THEY ARE, WE CAN ENSURE THEY
REMAIN SATISFIED WITH OUR SERVICE AT ALL TIMES.
SOUTH EAST WATER
4
Welcome to the most ambitious business plan we have
ever produced.
We provide an essential community-based service,
delivering safe, high quality drinking water around the
clock to 2.2 million customers.
In providing this essential service, we recognise the
responsibility that comes with being a regulated
monopoly. Our customers cannot choose their water
supplier so it is our job to keep water bills affordable,
especially for hard-pressed families and those with
specific needs.
It is also our responsibility to make sure our actions
and behaviours, as well as our product and services,
allow customers to trust us - something that our own
customer research has shown is diminishing in companies
generally, the media, politicians and regulators.
The ambition in this plan is designed to lead the way so
we build greater trust.
FROM A POSITION OF TRUST:
We can increase customers' satisfaction and drive
better performance. Measuring customer satisfaction
with our performance was at the core of our last
business plan and is at the core of this one too - but
we have evolved our innovative approach further with
satisfaction by attitudinal segment
we can meet customers' changing needs and
expectations around their water use and the
information they want to understand it better.
Similarly, understanding the additional support they
would like from us, particularly when things go wrong
with their water supply, is feedback we continue to get
and which is reflected in this plan
We are driven by the same values of trust as our
customers. We are a business made up of dedicated
water people who want to make a difference - to
customers, communities, the environment and society
- so that everyone and everything thrives as a result of
what we collectively do.
We are immensely proud of being a local water company
with a passion for sharing our 'pure know h 2 ow' - and we
have used our customers' desire to know more about
their water supply service to develop our 'resilient
customer' concept. Whether it is reacting intuitively to
BY
NICK SALMON
CHAIRMAN
WELCOME
2020 TO 2025 BUSINESS PLAN
5
the weather and reducing their demand, looking after their own pipes and plumbing
to prevent bursts, or promoting the services we offer vulnerable customers so more
can access them, we believe our resilient customer concept will see customers
empowered to act and advocate on all things water.
An independent Customer Challenge Group (CCG) has assessed both the quality of our
customer engagement, and the degree to which the findings of that engagement are
reflected in this plan.
Our CCG, which comprises regulators, customer and community representatives,
and economic and research experts from other industries, has been central to the
development of this plan. It has scrutinised and challenged many of the decisions
we have made, ensuring our business plan promises meet current and future
customers' needs.
Its challenges have been based on considerable expertise and extensive involvement
by the CCG members in our customer engagement programme, attending 47 of our 99
focus groups with customers and stakeholders.
We have embraced these challenges and they have had a positive impact on our plan
and business. As a result, the scale and quality of engagement has been considerably
enhanced, providing greater insight which has driven the decisions we have made.
In fact the CCG engagement has been so beneficial the Board has made a long-term
commitment to embed it as a business priority.
Similarly, our Environmental Focus Group (EFG) - already considered best-practice
engagement by regulators - has significantly influenced, challenged and provided
feedback on our 60-year water resources management plan for 2020 to 2080.
The insight we have gained from all of our engagement is further underpinned by a
powerful insight database that captures over 800 lines of findings - and provides the
critical starting point for the golden thread that runs through much of what we are
promising to do over the next five years.
WELCOME
"
PASSION IS WHAT MAKES
THE AMBITIOUS PROMISES
IN THIS PLAN CREDIBLE,
SO THAT CUSTOMER
SATISFACTION IS
RESPONSIBLY DELIVERED
SOUTH EAST WATER
6
THE RESULT IS A PLAN
1
Which remains built around customer satisfaction , but which has
improved from measuring average satisfaction across seven service elements
to measuring satisfaction by attitudinal segments so we meet the expectations
of all our customers - whatever their needs or circumstances
2
Which strengthens the link between satisfaction and resilience by making
customers part of the solution by giving them targeted information, and as
such, greater control over their water use. We have used recent supply
challenges in 2018 - such as the freeze thaw and heatwave - to develop this
further through our resilient customer concept
3
Which has a focused innovation strategy which targets our customers'
and stakeholders' priorities; and where we can make the most difference
to lead the industry, not least using our toolboxes to deliver greater
customer satisfaction
4
Which has 10 new responsible business commitments to reflect the
actions and behaviours that customers expect a responsible business to display;
and, in conjunction with great service, have the potential to create a step-
change in trust of the water sector
5
Which challenges us to deliver performance levels well beyond
anything we have delivered historically and new ones too; such as our
performance commitments relating to vulnerable customers, the environment
and customer satisfaction
6
Which when all the components are intrinsically linked as a package,
only four per cent of our customers did not find it acceptable
2020 TO 2025 BUSINESS PLAN
7
The challenge of doing more for less should not be underestimated. We
have 35 new performance commitments in this plan. To deliver those while
keeping water bills stable has required us to make aggressive assumptions
on our ability to reduce total expenditure, via bold efficiency and
productivity improvements.
The performance commitments also create significant risk of financial
penalties to the business. To illustrate this, the incentives and targets are so
ambitious that if we were to keep our current performance stable, we would
attract a performance penalty of £35 million between 2020 and 2025.
Maintaining a financeable structure and credit rating with the historical
low cost of capital expected across the industry will see our shareholders
accept the lowest-ever returns on their investment. We are also planning
to de-gear to 75 per cent through introducing an additional £55 million of
equity prior to 2020.
All these critical elements of our plan are designed to work as a complete
package. Material changes to any of these elements are likely to have a
significant impact on the deliverability of the plan as a whole.
That said, our ambition to do more for less is what this plan is built upon and
is what drives us to set a new tone of trust and transparency in the water
sector. We will do this by evolving our use of satisfaction and introducing
responsible business commitments.
NICK SALMON
CHAIRMAN
ALL AT
THE SAME
PRICE
AS NOW
WELCOME
SOUTH EAST WATER
8
How this plan
addresses
great customer
service,
resilience,
affordable bills
and innovation
Key headlines
for our 2020
to 2025
business plan
£204
the average household
water bill (before inflation)
£20.5 million
in outperformance
payments
78%
of customers
accept this plan
£86.4 million
in underperformance
penalties
2020 TO 2025 BUSINESS PLAN
9
PLAN HIGHLIGHTS
2.4%
the rate of return
for shareholders
35
performance
commitments
10
responsible business
commitments
13,000
customers
engaged
120
research
activities
£84 million
retail
costs
GREAT CUSTOMER
SERVICE
RESILIENCE
AFFORDABLE
BILLS
INNOVATION
Evolving customer
satisfaction to six
attitudinal segments
Dedicated strategy
to keep our services
affordable, accessible
and protective
Priority Services
Register support for
60,000 customers
Six new vulnerability
measures
Resilient customer
Leakage reduced by
14 per cent
Per capita
consumption reduced
by nine per cent
Greater resilience
to severe droughts
Six environmental
measures
Average household bill
maintained at £204
Financial assistance
extended to further
43,500 eligible
customers
Cost of capital lowest
ever at 2.4 per cent
Efficiency savings
of £45 million
Targeted innovation
strategy
Behaviour change,
partnership and
innovation toolboxes
10 new responsible
business
commitments
Focus on
environmental
engagement
£961 million
the total wholesale
cost of our plan
£45 million
the efficiencies
we will make
SOUTH EAST WATER
10
WHAT MAKES THIS PLAN
DIFFERENT - FROM OUR LAST
PLAN AND THOSE OF OTHER
WATER COMPANIES
KNOWING OUR CUSTOMERS BETTER
AND KEEPING THEM SATISFIED WITH
OUR SERVICE
We were the only water company to introduce
a suite of innovative customer satisfaction
commitments for our 2015 to 2020 business plan.
We did that because we believe customer
satisfaction is the best yardstick for everything
we do. It underpins customers' trust in us; and is
the very essence of what a responsible business
should be.
Customer satisfaction responsibly delivered is the
core theme of this plan but achieves much more.
HERE IS HOW
Customer
satisfaction drives...
greater trust
among customers
...which means
They have confidence in
the quality and reliability
of their drinking water, rate
our services positively, and
think the price they pay is
excellent value for money
1
Customer
satisfaction drives...
innovation in the
right areas
...which means
We focus on delivering what
matters most to customers in the
areas they want us to do more in
4
2020 TO 2025 BUSINESS PLAN
11
Customer
satisfaction drives...
us to be a
responsible
business
Customer
satisfaction drives...
smarter
engagement
Customer
satisfaction drives...
greater resilience
...which delivers
More society-wide
benefits through our
education, partnerships
and lobbying work
...which means
We deliver the service
customers need and expect,
especially to those in
vulnerable circumstances
...because
Customers are
empowered to do their
bit and communities and
stakeholders work more
closely with us on old and
new challenges
3
5
2
PLAN HIGHLIGHTS
HOW CUSTOMER SATISFACTION DRIVES GREATER TRUST
Customer satisfaction is the best yardstick for everything we do - not least as it
underpins our customers' trust in us. Our own research has shown that trust is
diminishing in companies generally, the media, politicians and regulators.
We know trust has to be earned and maintained. The drive to do this comes from a
business full of dedicated water people - from field teams to the Boardroom - who
all want to make sure that everyone and everything thrives as a result of what we
collectively do. It is also why we have invested heavily in our 'pure know h 2 ow' brand -
how we make customers feel when they engage and interact with us has been shown to
improve their perception of us, and their satisfaction with what we do too.
HOW CUSTOMER SATISFACTION DRIVES GREATER RESILIENCE
Because we know our customers better, we have a greater understanding of what
makes them tick.
We can then use successfully-tested behavioural science techniques to nudge
different behaviours in customers; and have identified a wide ranging set of resilient
customer attributes that make them part of the solution.
Whether it is reacting intuitively to the weather and reducing their demand, looking
after their own pipes and plumbing to prevent bursts, or promoting the services
we offer vulnerable customers so more can access them, customers will have been
empowered to act and/or advocate on all things water.
HOW CUSTOMER SATISFACTION DRIVES SMARTER ENGAGEMENT
For this plan we have evolved our innovative use of customer satisfaction by:
Segmenting customers by their attitudes to water and their values
measuring each segment's satisfaction with our future performance
- including those customers in vulnerable circumstances
HOW CUSTOMER SATISFACTION DRIVES INNOVATION
Our stretching performance commitments will need to be matched with greater
innovation. Our future innovation has been deliberately focussed on our customers'
and stakeholders' priorities and where there are the greatest opportunities for us
to innovate - specifically customer satisfaction, support for vulnerable customers,
leakage and demand management, catchment management and biodiversity.
We have developed toolboxes to deliver on our promises which ensure that
customers, stakeholders and society play a greater part in the delivery of our services
and become part of the solution to old and new challenges.
SOUTH EAST WATER
12
MINDFUL
OPTIMISTS
GLOBAL
ADVOCATES
JUST ME
AND MINE
CAREFUL
NEIGHBOURS
BUSY
JUGGLERS
LIVING FOR
TODAY
OUR TOOLBOXES
The behavioural change toolbox for customers - using
successfully-tested behavioural science techniques as well as
more traditional campaigns and literature to tap into attitudes
so that customers help us achieve shared goals
The partnership toolbox for our stakeholders - who have
a strong desire to increase their participation in water issues
and activities
The innovation toolbox for the supply chain to work with
our business - so that we can adopt or adapt existing
technologies while actively seeking out new ones
2020 TO 2025 BUSINESS PLAN
13
PLAN HIGHLIGHTS
HOW CUSTOMER SATISFACTION DRIVES US BEYOND WATER SUPPLY
Many of our water supply duties and obligations are enshrined in legislation. Being
compliant with these laws translates into strong performance and high levels of
service; in turn, providing confidence to customers and stakeholders that we are a
responsible business.
However our research in this area has shown customers expect much of this
compliance to be a given and are looking for more from a responsible business.
We have defined this in the following ways:
Six new vulnerability performance commitments
We have stretched our performance and ambitions for this plan with six new
performance commitments specifically around vulnerability. These have been
co-created with our customers, stakeholders, employees and our CCG; so too has
the strategy that underpins these performance commitments.
Six new environmental performance commitments
Operating in an environmentally diverse yet water-stressed area we need to make
the right choices for our local communities and the environment. Our suite of six
new performance commitments recognise the influence we can, and should, have
on landowners, other water users and abstractors to make water catchments more
resilient to drought, while also ensuring we enhance habitats to give wildlife an
opportunity to thrive.
10 specific responsible business commitments
We have developed a suite of 10 responsible business commitments for key areas
which customers and stakeholders have told us represent important aspects of what
being a responsible business is.
SOUTH EAST WATER
14
"
OUR PERFORMANCE COMMITMENTS ARE
AMBITIOUS AND STRETCHING, AND THE
CHALLENGE OF MEETING THEM SHOULD
NOT BE UNDERESTIMATED
2020 TO 2025 BUSINESS PLAN
15
HOW OUR PLAN BUILDS ON OUR
CURRENT PERFORMANCE
This plan builds on our
current performance
which has delivered
an improvement in customer satisfaction scores for:
the appearance of drinking water
the taste and odour of drinking water
leakage
water pressure
water restrictions
customers' direct interaction with us
a maintained customer satisfaction score for water
supply interruptions, despite a number of significant
operational challenges
a strong improvement in our Service Incentive Mechanism
score and complaints at their lowest levels
safe, high-quality drinking water that meets stringent
standards and maintains customers' trust - underpinned by
a continuous reduction in the number of customer contacts
about discolouration and stable performance on taste and
odour issues
a top-performing industry position for our leakage
performance
stable assets and a secure supply of water with no water
use restrictions - despite the 2018 heatwave driving sustained
high demand
our wide ranging environmental and statutory
obligations including our award-winning catchment
management programme
a steady performance on all our financial obligations
CHECKLIST
2015 to 2020
PLAN HIGHLIGHTS
SOUTH EAST WATER
16
SHARING OUTPERFORMANCE WITH CUSTOMERS
Our performance commitments for this plan either have:
An outperformance payment
and an underperformance penalty
an underperformance penalty
a reputational incentive
Combined they strike the right balance so we:
For this plan we face the prospect of more underperformance penalties than
outperformance payments.
Combined, they represent a maximum £86.4 million underperformance penalty or
a maximum £20.5 million outperformance payment, which is equivalent to a return
rate of -3.1 per cent to +0.7 per cent on the regulatory value of our business.
Our performance commitments are ambitious and stretching, and the challenge of
meeting them should not be underestimated.
Why? Based on our current performance in this five-year period - but applying the
new targets - we would face a potential penalty of £35 million, five times the level
of the penalty in our last business plan.
DRIVE THE CHANGES
IN PERFORMANCE
WE NEED TO MAKE
FOCUS ON ALL AREAS
OF OUR BUSINESS -
NOT JUST SOME
2020 TO 2025 BUSINESS PLAN
17
HOW THIS PLAN IS FOR THE LONG TERM
This pIan provides the context for the decisions and investment we need to make for
the long-term.
That is critical as we operate in a region that, compared to the rest of the UK, is
relatively affluent with higher water use by customers and will continue to see
significant population growth - and yet is also the most water-stressed region in the
UK. Meeting the demand for water over the next few decades with what water is
available to supply will be our biggest challenge.
Among the solutions are:
To move away from the current economic level of leakage to a customer accepted
level of leakage
to better understand what our customers use their water for, and support them
in reducing how much of it they use. Significant progress has been made in this
area as a result of our successful metering programme, which has seen per capita
consumption (PCC) reduce by 16 per cent, but this downward trend needs to
continue
That is why the investment we set out in this plan - whether that is smarter data
gathering or behavioural science studies - is needed to support our twin aims of
reducing leakage and customer water use so that both taps and rivers keep flowing.
73%
of the water that will meet new demand by 2080 will
come from saving more through leakage and water
efficiency
"
THIS PLAN PROVIDES THE
CONTEXT FOR THE DECISIONS
AND INVESTMENT WE NEED TO
MAKE FOR THE LONG-TERM
PLAN HIGHLIGHTS
SOUTH EAST WATER
18
Pure know h 2 ow
2020 TO 2025 BUSINESS PLAN
19
CONTENTS
20
HOW THIS PLAN IS BASED ON
WHAT OUR CUSTOMERS AND
STAKEHOLDERS TOLD US
23
CONVERTING INSIGHT INTO
OUTCOMES AND COMMITMENTS
39
WHAT WE WILL DO TO MEET OUR
PERFORMANCE COMMITMENTS
55
AFFORDABLE, ACCESSIBLE AND
PROTECTIVE SERVICES FOR ALL
77
DELIVERING RESILIENCE IN
THE ROUND, FROM SOURCE TO TAP
93
THE FINANCIALS OF OUR PLAN
113
HOW THIS PLAN IS FAIR FOR ALL
135
HOW THIS PLAN IS INNOVATIVE
149
HOW THIS PLAN BUILDS ON OUR
CURRENT PERFORMANCE
157
OUR ASSURANCE OF THIS PLAN
171
DELIVERING GREAT CUSTOMER
SERVICE, RESILIENCE, AFFORDABLE
BILLS AND INNOVATION
186
1
2
3
4
5
6
7
8
9
11
12
10
1
1.1 THE STRUCTURE OF THIS PLAN
Chapter 2: How this plan is based on what our customers and stakeholders told us
We set out how we have listened to customers and stakeholders, what we have
learnt from that engagement and how we have analysed and used that insight to
determine their priorities.
Chapter 3: Converting insight into outcomes and commitments
Priorities need to be converted into outcomes - the headlines of our
plan - but they are supported in much more detail by the stretching
performance commitments we have set.
Chapter 4: What we will do to meet our performance commitments
We outline the range of activities we will undertake over the next
five years to meet all of our 35 performance commitments.
Chapter 5: Affordable, accessible and protective services for all
We have stretched our ambitions for this plan to keep our services
affordable, accessible and protective for all customers, whatever their
circumstances, and set out how we will do more as the provider of an
essential service.
Chapter 6: Delivering resilience in the round, from source to tap
We have looked at what we need to do to become more resilient
through a source to tap resilience lens and explore the important
role a resilient customer can play too.
Chapter 7: The financials of our plan
Our total expenditure for 2020 to 2025 is £1 billion and we have used the
same level of ambition in setting our costs too by challenging ourselves
to deliver our investment more efficiently.
Chapter 8: How this plan is fair for all
We have applied ambitious incentives to all of our performance commitments
so that they are fair and reflective of the strategic direction of our business and
what customers have told us is important to them - and balance any risks around
the decisions we have to take.
Chapter 9: How this plan is innovative
Innovation is essential if we are to deliver our outcomes and performance
commitments, and so we set out our strategy and our areas of focus that will
support us in our ambitions.
CONTENTS
SOUTH EAST WATER
20
Chapter 10: How this plan builds on our current performance
Our 2020 to 2025 plan is built on the strong performance we have already achieved,
and are forecast to continue within the current five year period, while we also explore
the lessons learnt that have shaped this plan.
Chapter 11: Our assurance of this plan
We have followed strong assurance principles and a robust governance framework to
produce this plan, and our Board has collectively assured it.
Chapter 12: Delivering great customer service, resilience, affordable bills and innovation
A visual reminder of how this plan addresses these four key themes.
1.2 THE EVIDENCE THAT SUPPORTS THIS PLAN
Producing a business plan of this complexity requires a lot of supporting evidence so
our proposals can be scrutinised in more detail. We have provided this evidence in the
following appendices:
Appendix
Subject
1
Engagement
2
Performance commitments and outcome delivery incentives
3
Responsible business
4
Business retail water market
5
Growth and new development
6
Water quality
7
Water resources
8
Vulnerability: affordable, accessible and protective services
9
Resilience in the round
10
Environmental resilience
11
Our investment plan
12
Retail
13
Wholesale efficiency
14
Financial
15
Risk management and mitigation
16
Innovation
17
Direct procurement for customers
18
Current performance
19
Cost adjustment claims
20
Governance and assurance
21
PR14 reconciliation
22
Table commentary
Throughout this document you will see this symbol which
tells you where you can find more supporting evidence.
2020 TO 2025 BUSINESS PLAN
21
SECTION 1
"
OUR ATTITUDINAL
SEGMENTATION
WAS A DEFINING
FEATURE OF OUR
ENTIRE RESEARCH
PROGRAMME
FOR THIS PLAN
SOUTH EAST WATER
22
2
HOW THIS PLAN
IS BASED ON WHAT
OUR CUSTOMERS AND
STAKEHOLDERS TOLD US
2.1 Our innovative approach to
listening and learning
24
2.2 How we have used
the insight
30
2.3 Engaging with our
Customer Challenge Group
32
2.4 Engaging with our
Environmental Focus Group 36
2020 TO 2025 BUSINESS PLAN
2
2.1 OUR INNOVATIVE APPROACH TO
LISTENING AND LEARNING
We have embraced the required step-change in customer
engagement and participation for this plan. It means we can
better understand our customers' priorities and deliver the
outcomes that matter most to them; and, in turn, build their
trust and satisfaction with the service they receive from us.
In doing so we have also been innovative in the following ways:
Developing attitudinal segmentation
evolving our engagement for our 2020 to 2025 business plan
constantly capturing the views of customers
making customer satisfaction a Board priority
We now explore each of these in more detail.
2.1.1 DEVELOPING ATTITUDINAL SEGMENTATION
We have deliberately moved away from the notion of a plan for
the average customer and evolved attitudinal segmentation
to identify the diverse and changing values, priorities and
expectations of customers.
We carried out a specific piece of research to:
Help us define the customer segments that exist among
our customer base
understand those customers' priorities and current levels
of satisfaction with our service
Our research clearly revealed six customer segments.
HOW THIS PLAN
IS BASED ON WHAT
OUR CUSTOMERS AND
STAKEHOLDERS TOLD US
Appendix 1
Engagement
SOUTH EAST WATER
24
This more dynamic approach to understanding our customers is being embedded
in the business, allowing us to evolve our organisation, services and communication
as customers move between segments. The benefits are two-fold:
By moving our plan away from the average customer we can better understand
the diverse make-up of our customers and their needs and expectations - and
drive higher levels of satisfaction and trust
we can identify how best to nudge each customer segment so that they are
empowered to act and advocate - whether reacting intuitively to the weather,
looking after their own pipes and plumbing, or promoting the services we offer
vulnerable customers. This has shaped our resilient customer concept which you
can read more about in chapter six of this plan
2020 TO 2025 BUSINESS PLAN
25
SECTION 2
GLOBAL
ADVOCATES
Affluent, financially
secure and engaged
in the big picture
16%
BUSY
JUGGLERS
Tech immersed,
would be more
outwardly focused
if they had time
15%
Customer
segment
Attributes
Per cent of
customer base
Customer
segment
Attributes
Per cent of
customer base
MINDFUL
OPTIMISTS
Less affluent, with
community versus
corporate focus
23%
CAREFUL
NEIGHBOURS
Kind and thoughtful
about their community,
financially careful and
waste conscious
12%
JUST ME
AND MINE
Comfortable and
whose main focus is on
their immediate world
12%
LIVING
FOR TODAY
Low social
conscience with
spontaneous
nature
22%
SOUTH EAST WATER
26
2.1.2 EVOLVING OUR ENGAGEMENT FOR THE
2020 TO 2025 BUSINESS PLAN
Our research for this plan has been even more
extensive, with 120 separate elements of research
undertaken with nearly 13,000 customers,
stakeholders and businesses .
The research used traditional methods and more
innovative approaches - such as alternative gamification
techniques.
Our attitudinal segmentation was also a defining feature
of our entire research programme for this plan. For each
piece of research we undertook, we developed a set of
golden questions to find the segment that every engaged
customer identified themselves with.
Age
1-2-1
interviews
900
16-34
35-49
50-64
65+
81
Focus
groups
2020 TO 2025 BUSINESS PLAN
27
SECTION 2
10
Gender
Social
Postal
surveys
Shopping centre
surveys
Web-based
gamification
Segment
Business
7000+
4
5
1
Online/telephone
surveys
Stakeholder
workshops
ABC1
C2
DE
50% 50%
4
Customer
workshops
SOUTH EAST WATER
28
2.1.3 CONSTANTLY CAPTURING THE VIEWS OF CUSTOMERS
Our listening and learning approach has gone far beyond the extensive customer
research and engagement carried out for this plan.
We have analysed insights from multiple channels and sources including:
LISTENING
AND LEARNING
OPERATIONAL
CONTACTS
BILLING
CONTACTS
STAKEHOLDER
ENGAGEMENT
CUSTOMER
CARE TEAM
FEEDBACK
CUSTOMER
SATISFACTION
SURVEYS
INDUSTRY
REPORTS
SOCIAL MEDIA
SENTIMENT
This programme has allowed Board members to gain a richer and deeper level of
insight from customers about their water supply service and any issues they have
with that service.
The Board has translated that insight into a number of targeted areas and priorities
it wants us to address in this plan, and beyond.
5
CCG
MEETINGS
24
ENGAGEMENT
EVENTS
9
CUSTOMER
RESEARCH
EVENTS
7
CONTACT
CENTRE VISITS
3
CUSTOMER
OPEN DAYS AND
KNOW H 2 OW
AWARDS
6
CCG
VULNERABILITY
SUB-GROUP
MEETINGS
10
VULNERABILITY
EVENTS
2020 TO 2025 BUSINESS PLAN
29
SECTION 2
2.1.4 MAKING CUSTOMER SATISFACTION A BOARD PRIORITY
The Board actively sought to get more involved in engaging with customers and
stakeholders to gain a greater depth of insight and learning. This has driven further
improvements in understanding customer satisfaction and led to the creation of our
Board engagement programme, which included:
BOARD
ENGAGEMENT
PROGRAMME
Appendix 1
Engagement
Appendix 1
Engagement
"
THE RESULT IS A STRONG AND VISIBLE
GOLDEN THREAD THAT RUNS FROM THE
INSIGHT WE GAINED TO WHAT WE HAVE
SET OUT IN OUR PLAN
SOUTH EAST WATER
30
2.2 HOW WE HAVE USED THE INSIGHT
2.2.1 ANALYSING THE FINDINGS
We used independent research specialists to analyse the information and data
we received from multiple channels of customer engagement - whether from the
insights from our last business plan, our own and others' customer research, our
stakeholder engagement or our business-as-usual transactions and conversations.
In doing this we have followed the Consumer Council for Water's (CCW) seven
guiding principles for triangulating information and data from multiple sources.
Our CCG also asked for two other issues to be considered during our analysis which
we included:
The time horizon - is it relevant only for the 2020 to 2025 period or the
longer term?
the individual versus the wider community benefit
Each finding then had a business area or theme allocated to it - for example leakage,
asset health, communications, resilient water supply.
The result of that work was an insight database comprised more than 800 findings
in total, which is reflective of the breadth and depth of the engagement we carried
out as a business. It not only documented every relevant insight and our learnings,
but also where they may potentially conflict with (or complement) learnings from
elsewhere.
A final stage involved looking at each common theme to understand how it could
impact on our business plan, taking into account:
The data source
how the insight is relevant to our business - for example its influence on
customer priorities, levels of service, cost issues and overall acceptability
of the plan
how the insight has been included into our plan - for example outcomes,
performance commitments, setting of outperformance payments and
underperformance penalties, and the use of our toolboxes
?
2020 TO 2025 BUSINESS PLAN
31
SECTION 2
OVERALL
THEMES
Affordability
Vulnerability
Resilient supply
Water efficiency
Leakage
Water quality
Natural
environment
Resilience
in the round
RESEARCH
FINDINGS
Research finding 1
Research finding 2
Research finding 3
Research finding 4
Research finding 5
Research finding 6
Research finding 7
Research finding 8
Research finding 9
Research finding …
Research finding 813
OUTCOME
HEADLINES
Everyone
counts
Every drop
counts
Everyone's
future counts
Supported by
12 outcomes
PERFORMANCE
AND
RESPONSIBLE
BUSINESS
COMMITMENTS
35 performance
commitments -
including 12 new
ones on vulnerability
and environment
Plus 10 new
responsible
business
commitments
2.2.2 THE GOLDEN THREAD FROM INSIGHT TO PLAN
2.3 ENGAGING WITH OUR CUSTOMER CHALLENGE GROUP
2.3.1 INTRODUCTION
An independent Customer Challenge Group (CCG) assessed both the quality of our
customer engagement, and the degree to which the findings of that engagement
are reflected in this plan.
Our CCG, which comprises regulators, customer and community representatives,
and economic and research experts from other industries, has been central to the
development of this plan. It has provided significant scrutiny and challenge to many
of the decisions we have made, ensuring our business plan promises meet current
and future customers' needs.
Its challenges have been broad-ranging, strategic and detailed - from helping
shape the co-creation of our customer service strategy and services (an area
where engagement has the capacity to deliver significantly better outcomes) to
detailed inputs into our research methodology and materials, which we have then
incorporated.
In fact the CCG members had extensive involvement in our engagement
programme, with members attending 47 of our 99 focus groups and workshops
across numerous topics.
We have embraced the CCG's challenges and they have had a very positive impact on
our plan and business. The scale and quality of engagement has been considerably
enhanced, providing greater insight which has driven the decisions we have made for
this plan.
The group has written its own report for Ofwat on the quality of our customer
engagement, and the degree to which customers' views are reflected in this plan.
You can read their report at customerchallenge.co.uk/company-performance
Zoe McLeod is a leading consumer advocate with more
than 20 years' experience championing customer and
community concerns. She is currently an Associate with
the charity Sustainability First with a particular focus on
innovation, and improving customer service and quality of
life for those with additional needs and on low incomes.
SOUTH EAST WATER
32
ZOE MCLEOD
Chair
2.3.2 MEMBERS
2020 TO 2025 BUSINESS PLAN
33
SECTION 2
LOUISE BARDSLEY
Natural England
RICHARD LAVENDER
Business customer
representative, Kent Invicta
Chamber of Commerce
LESLIE SOPP
Independent research
and insight expert
KAREN GIBBS
Consumer Council
for Water
VERONICA MCGANNON
Household customer
and sheltered housing
representative
JANET HILL
Community representative,
Swale Borough Council
MAIRI BUDGE
Independent research
and insight expert
PENNY SHEPHERD MBE
Local consumer
advocate
ADRIENNE MARGOLIS
Household customer, and
communications and responsible
business expert
RUPIKA MADHURA
Regulatory policy
and economics expert
DAVID HOWARTH
Environment Agency
CAROLINE FARQUHAR
Citizens Advice,
North and West Kent
SOUTH EAST WATER
34
2.3.3 CHALLENGES
During 2017 and 2018 the CCG has held 13 main meetings, 24 engagement
sub-group and vulnerability sub-group meetings, and four separate sessions on
outcome delivery incentives. This has resulted in over 600 challenges and actions
as we prepared our plan.
2.3.4 CCG CONCLUSIONS
South East Water continues to be on a journey to embed engagement into its
everyday business. Since PR14 there has been a step change in the number, range
and quality of its engagement activities. On balance, we commend South East Water
for the exceptional progress it has made on customer engagement over the last year
and a half.
Against the CCG's quality of engagement assessment framework informed by
Ofwat's 'principles of good customer engagement', Citizen's Advice and AA1000
stakeholder standard, we have scored the company 7/10. In some areas, the
company has been very innovative - for example their values based customer
segmentation will enable the business to move beyond notions of an average
consumer and tailor communications and services to different customers' needs.
Their resilient customer concept considers how consumers can take control and
become partners with the company, to deliver solutions to improve their own
affordability, water security and peace of mind.
However, South East Water's engagement strategy upfront and over all planning
has been more challenging. A lack of in-house expertise and an historic stop-start
approach to engaging with customers around the business plan, has resulted overall
and in a lack of time for reflection, consolidation and flex. As a consequence the
CCG had less time than we would have liked to scrutinize certain areas. The overall
judgement on the score therefore has taken into account the company's size,
distance travelled since PR14 and how well the company has responded to CCG's
challenges, and where available, water sector benchmarks.
In total over the last year and a half we have made more than 190 challenges to
South East Water. The company has responded to 154 of these and the rest are still
in progress.
The CCG has challenged the company to build stronger engagement foundations and
they have responded well: we have seen mapping of stakeholders and customers;
more targeted engagement approaches; more robust and creative willingness to pay
research; better capture of customer insight, and increased engagement with hard
to reach groups and non-household customers.
There are still improvements to be made. South East Water has committed, for
example, to pilot deliberative research so that it they can have more informed
conversations with households and non-household customers on complex issues
such as future risks, challenges and trade-offs.
In line with Ofwat's Principle 1, the CCG is assured that the company is delivering
outcomes that the majority of customers and society value (albeit to varying
degrees) with a business plan acceptability rate of 78 per cent and 88 per cent
for household and non-household customers respectively. There is a strong link
between customers' priorities that we've heard and seen and the proposals in this
business plan. The company has been genuinely listening to its customers - including
its most vulnerable, and should be praised, in particular for its fledgling responsible
business strategy.
In practice, it has not always been clear that customer and non-regulatory
stakeholder views have genuinely driven as opposed to simply supported proposals.
This is particularly the case on water efficiency and leakage, where regulatory
expectations, not associated strong customer and stakeholder views, ultimately
prompted a change in the company's stated ambition levels.
We have thrown down a gauntlet to the Board to truly demonstrate its commitment
to engagement on an ongoing basis, during PR19 and beyond and it has taken it up.
We are pleased to report that they have promised to establish a new customer
insight function, a new vulnerability strategy and stakeholder team, and to work
with customers and stakeholders to co-develop and embed into the culture a
business as usual engagement strategy over the coming months. We have grounds
for optimism therefore that the company is on the right track.
2.3.5 OUR RESPONSE
The Board has valued the challenge, scrutiny and input of the CCG to this plan and
our wider business and we collectively recognise we need to improve in some areas
of our work.
We are immediately taking up the challenge given to us and have committed to:
Co-developing an engagement strategy with customers and stakeholders that
covers our wider business as usual activity
rolling out our customer service 'tell me simply' approach to the wider business
so that our communications are clear and compelling
creating a new Customer Insight Team, which will also develop a more dynamic
database that can be easily interrogated so that our listening and learning
evolves to become a year-round activity and an example of best practice
look beyond water sector boundaries to embed our innovation toolboxes and
how we co-create and co-deliver solutions to old and new challenges
improving our stakeholder engagement activity with dedicated resources
and systems
2020 TO 2025 BUSINESS PLAN
35
SECTION 2
2.4 ENGAGING WITH OUR ENVIRONMENTAL
FOCUS GROUP
2.4.1 INTRODUCTION
Our Environmental Focus Group (EFG) is recognised by regulators as being industry
leading in ensuring our long term planning is appropriately challenged. We also
understand the value of working with a group of stakeholders with a keen interest
in our long term plans, and allowing them to challenge and feedback on all the key
building blocks of our water resources management plan (WRMP).
Our EFG includes of the following members:
The Environment Agency
Natural England
The Consumer Council for Water
Kent County Council
East Sussex County Council
South Downs National Park Authority
Wealden District Council
Rushmoor Borough Council
Lewes District Council
Basingstoke and Deane Borough Council
Bracknell Forest Council
Ringmer Parish Council
Joint Parishes Group
World Wildlife Fund/Blueprint for Water
Council for the Protection of Rural England
Whitewater Valley Preservation Society
Salmon and Trout Association
Council for British Archaeology South East
South East Rivers Trust
Canterbury and District Angling Association
The Inland Waterways Association
Ouse and Adurs Rivers Trust
National Farmers Union
Anita McNaught, farmer
SOUTH EAST WATER
36
2.4.2 CHALLENGES
The EFG was able to challenge and provide feedback on each of the components of
our WRMP and our business plan during the entire process, including its relevance to
addressing strategic and local level issues. Specifically the EFG:
Helped to shape the criteria used to filter and appraise potential future supply
and demand options
challenged our levels of ambition in terms of improving resilience, environmental
performance and future demand management reductions, particularly on:
leakage - the strong consensus from the EFG members who responded
concluded that reducing leakage by a further 14 per cent by 2025 represented
an appropriate and stretching target
per capita consumption (PCC) - the majority of feedback considered our
PCC ambitions to be a stretching target both in the short and longer term -
although there was recognition that many PCC-controlling factors are arguably
outside of our control; and that industry comparators may not adequately
reflect the current performance or particular circumstances of each company
tested our assumptions, decisions, and co-created our supply and demand
solutions during the preparation of the WRMP
made formal representations to Defra on our proposals as a result of having a
deeper understanding of the process - of the 56 representations received by
Defra, eight were from organisations that are members of our EFG group
The value of the EFG during the development of our WRMP cannot be underestimated
and we are very grateful to its members for the time and effort they have given.
The group will continue to meet, not only to oversee the completion of this process,
but also to work with us during the implementation and review of our long term
water resource plans.
This type of ongoing engagement has been embedded as a business-as-usual
approach, so we continually feedback the learnings and insight into our decision-
making, especially as we deliver the performance commitments in this plan.
Appendix 7
Water resources
2020 TO 2025 BUSINESS PLAN
37
SECTION 2
"Natural England support
South East Water's commitment
to increase engagement with
landowners in priority risk areas
from 28% to 48% within the next five
years and to 60% by 2040. We believe
this to be a challenging target which
can deliver significant water quality
improvements in the long term."
"Natural England commend South East Water
for its exemplary work and consistent
commitment to protect and enhance wildlife
and increase biodiversity on company-owned
land. We believe the proposal to increase the
area of actively managed land from 54% to 67%
within the next five years and to 84% by 2040,
is a challenging commitment with potential
to significantly increase biodiversity across
South East Water's landholdings."
"
MAINTAINING
TRUST IN
DRINKING
WATER, KEEPING
CUSTOMERS
SATISFIED WITH
OUR SERVICE AND
GIVING EXTRA
HELP TO THOSE
WHO NEED IT
SOUTH EAST WATER
38
3
CONVERTING INSIGHT
INTO OUTCOMES AND
COMMITMENTS
3.1 Translating customers' and
stakeholders' priorities
into outcomes
40
3.2 Translating outcomes into
ambitious performance
commitments
42
3.3 Our responsible business
commitments
50
3.4 How we will report on our
performance and responsible
business commitments
53
2020 TO 2025 BUSINESS PLAN
3
3.1 TRANSLATING CUSTOMERS' AND
STAKEHOLDERS' PRIORITIES INTO
OUTCOMES
We have taken all our insights and learnings and converted
them into a set of outcomes. These are the promises we are
making in this plan and we have grouped them as follows:
Everyone counts - our know h 2 ow supports the health and
well being of our communities and society
Every drop counts - working together to reduce demand
through shared know h 2 ow
Everyone's future counts - ensuring long-term value
through resilient infrastructure and a thriving environment
CONVERTING INSIGHT
INTO OUTCOMES AND
COMMITMENTS
SOUTH EAST WATER
40
3.1.1 EVERYONE COUNTS - OUR KNOW H 2 OW SUPPORTS THE HEALTH
AND WELLBEING OF OUR COMMUNITIES AND SOCIETY
These outcomes underpin the shared importance of doing the basics right
which is to:
Maintain the high levels of trust in drinking water
keep customers, stakeholders and developers satisfied with the service
we provide
support those who may need extra help - whether with paying their water bill or
making sure they are looked after when things go wrong with their water supply
1. Our customers are happy with the service
we provide
2. Our customers trust the safety and quality
of their tap water
3. Developers are happy with the service we
provide to them
4. We help customers out of water poverty
5. We give customers extra help when they
need it
6. Our stakeholders are happy with the service we
provide to customers who need extra support
3.1.2 EVERY DROP COUNTS - WORKING TOGETHER TO REDUCE DEMAND
THROUGH SHARED KNOW H 2 OW
These outcomes recognise the shared importance we and customers place on
making every drop count by:
Not wasting what is a valuable and finite resource
making the water we have already go much further - by driving down demand
and accounting for all the water we abstract and supply
7. Leakage levels are sustainable and supported
by customers
8. Customers are empowered to reduce their
water use
9. All the water we supply is accounted for
2020 TO 2025 BUSINESS PLAN
41
SECTION 3
Appendix 2
Performance
commitments
and outcome
delivery
incentives
3.1.3 EVERYONE'S FUTURE COUNTS - ENSURING LONG-TERM VALUE THROUGH
RESILIENT INFRASTRUCTURE AND A THRIVING ENVIRONMENT
These outcomes recognise the greater environmental guardianship role our
customers and staff want us to play; and whatever the weather and challenges,
we keep taps and rivers flowing.
10. Our water supplies are maintained
during more severe droughts
11. Our water supply network is resilient
for this generation and the next
12. Our environment thrives, now and into
the future
3.2 TRANSLATING OUTCOMES INTO AMBITIOUS
PERFORMANCE COMMITMENTS
3.2.1 OUR APPROACH
Outcomes are the headlines of our plan but they are supported by much more detail
in the shape of performance commitments - these describe what we are committing
to deliver.
For this plan we have embraced the challenge of developing even more stretching
performance commitments.
In setting them we set out the following objectives. Our performance commitments
needed to:
Reflect the priorities of our customers and stakeholders
reflect the Board's aim of ensuring all aspects of our service are measured
reflect the Board's ambition to drive further improvements in customer
satisfaction and support for vulnerable customers
develop plans that are consistent with Ofwat's guidance for common and
bespoke performance commitments, and which have a good balance of
outcome-based and asset based measures
review what we included in our 2015 to 2025 business plan
reflect feedback from our CCG
SOUTH EAST WATER
42
Step
1
Customer
research
Step
2
Common
PC review
Step
3
Bespoke
PC
Step
4
Package
test
Step
5
Stakeholder
engagement
PERFORMANCE COMMITMENTS
Having identified these objectives we used the following five-step process to
develop our 2020 to 2025 performance commitments:
Outcomes are the headlines of our plan but they are supported by much more detail
in the shape of performance commitments - these describe what we are committing
to deliver.
For this plan we have embraced the challenge of developing even more stretching
performance commitments.
We also followed the methodology for setting performance commitment levels
using the six inputs summarised on page 44. That meant we could see the change
in performance we would need to achieve and the potential incentives that may
apply if we exceeded or missed those targets - so we could make sure our targets
were ambitious.
Our performance commitments for this plan:
Are built on what we are already delivering - but have been expanded to ensure
we are meeting any new or changing priorities of our customers and stakeholders
have been cross-checked against our insight database - to ensure we are
reflecting customers' expectations of where our performance needs to improve
have had extensive input and scrutiny from our CCG - with four dedicated
sessions on their development
If we make no improvements in the service we provide we would face a
penalty of £35 million over the five year period. This is five times the level
of the equivalent figure in our last business plan.
2020 TO 2025 BUSINESS PLAN
43
SECTION 3
Appendix 2
Performance
commitments
and outcome
delivery
incentives
Our performance commitments are a mix of targets - both common across the
sector and bespoke to us - and customer satisfaction measures, and were devised
using some or all of the following inputs:
SOUTH EAST WATER
44
We also calculated the amount of change needed in our performance so we could
get a sense of the level of stretch and ambition that would be needed - for each
performance commitment, and the package as a whole.
The following table summarises:
Our performance commitments for 2020 to 2025
our ambitions in the longer term
our 2017/18 performance
why this plan's performance commitments are stretching
Appendix 2
Performance
commitments
and outcome
delivery
incentives
Setting
performance
commitments
Historical data
Cost benefit
analyisis
Comparative
data
Minimum
improvement
Maximum level
attainable
Expert knowledge
3.2.2 OUR 2020 TO 2025 PERFORMANCE COMMITMENTS
Outcome
Measure
2025
performance
commitment
2040
ambition
Our 2017/18
performance
% change
from 2017/18
to 2025
Our customers
are happy with
the service we
provide
Customer
experience measure
(C-MeX)
Upper quartile
Upper quartile New measure New measure
We are aiming to be upper quartile for this measure when we are currently ranked in
the middle of the industry (despite a continued trend of reducing complaints)
Segmented
satisfaction
of household
customers
4.5
4.6 New measure New measure
We need to achieve the highest-ever overall level of satisfaction that we have seen -
and for all customer segments - since we started measuring customer satisfaction
Satisfaction
of household
customers who
are experiencing
payment difficulties
4.5
4.6 New measure New measure
Satisfaction
of household
customers who
are receiving
non-financial
support
4.5
4.6 New measure New measure
Satisfaction
of household
customers who are
on our vulnerability
schemes during a
supply interruption
Target set in
2019/20*
Target set in
2019/20*
New measure New measure
Our six new performance commitments on vulnerability are based on us achieving the
highest-ever overall level of satisfaction that we have seen - for any customer type,
since we started measuring customer satisfaction
Satisfaction of
stakeholders
in relation to
assistance schemes
offered by South
East Water
Target set in
2019/20*
Target set in
2019/20*
New measure New measure
* we will be undertaking baseline surveys to set our performance commitments
for these new satisfaction measures, so they are in place for the start of the
2020 to 2025 period
2020 TO 2025 BUSINESS PLAN
45
SECTION 3
Outcome
Measure
2025
performance
commitment
2040
ambition
Our 2017/18
performance
% change
from 2017/18
to 2025
Our customers
trust the
safety and
quality of their
tap water
Number of
customer contacts
about tap water
appearance (per
1,000 population)
0.79
0.50
1.32
40%
This means a 40% reduction in contacts from customers from a starting point of being
just below the industry average position for number of contacts per 1,000 population.
We have a unique treatment challenge posed by raw waters rich in iron and
manganese from greensand boreholes, with few alternative sources in what is a water
stressed region
Number of
customer contacts
about tap water
taste and odour (per
1,000 population)
0.29
0.09
0.51
44%
This means a 44% reduction in contacts from customers from a starting point of being
just below the industry average position for number of contacts per 1,000 population.
Achieving this target will put us in the upper quartile for all companies not using
chloramination to reduce taste and odour issues
Water quality
Compliance Risk
Index (CRI)
0
0
2.03 New measure
We aim to have zero water quality failures during 2020 to 2025
Developers
are happy with
the service
we provide to
them
Developer
experience measure
(D-MeX)
Upper quartile Upper quartile New measure New measure
This is a new common performance commitment for the entire industry and we are
aiming to be upper quartile for this measure
We help
customers
out of water
poverty
Household
customers receiving
financial support
65,000
135,000
21,445
203%
The target is a substantial increase in the number of customers receiving financial
support. This will be delivered through increasing our customer care team, more
collaboration and partnerships with a range of stakeholders
3.2.2 OUR 2020 TO 2025 PERFORMANCE COMMITMENTS CONTINUED
SOUTH EAST WATER
46
Outcome
Measure
2025
performance
commitment
2040
ambition
Our 2017/18
performance
% change
from 2017/18
to 2025
We give
customers
extra help
when they
need it
Household
customers receiving
non-financial
support
60,000
150,000
9,325
543%
This would take the number of customers on our Priority Services Register to 60,000 -
more than six times the current number We believe our new target is likely to be at or
around the frontier-leading position
Leakage levels
are sustainable
and supported
by customers
Leakage reduction
target
10% reduction
three year
average
14% reduction
for annual
target
33%
-0.7%
(relative to
2019/20
baseline)
14%
We are already among the top five water companies for our leakage performance. We
have reduced leakage consistently every year since this measure was introduced but
are committing to reduce it by a further 14%. Due to our strong performance it will be
more challenging to maintain our position as one of the best performing companies
Customers are
empowered to
reduce their
water use
Per capita
consumption (three
year average)
140
125
154
9%
Customers in our area have the highest water use in the UK, due to it being warmer
and drier and more affluent - which all drives more outdoor use of water, particularly
garden watering. Using our innovative toolboxes our ambition is to help customers
reduce their water use to 140 litres per person per day by 2025. This can only be
achieved by behavioural change as we have already reduced demand by 16% from our
metering programme
All the water
we supply is
accounted for
Gap sites
Programme
Achieved
Programme
Achieved
New
measure
New
measure
We will match all of the one million properties in our supply area to standard UK
address databases by 2025. This has never been undertaken before on such a scale,
or in a single five-year period
Percentage
of household
properties that
are empty
2.1%
2.1%
2.2%
4.5%
Percentage of
businesses that
are empty
8.1%
8.1%
8.1%
Stable
We want to retain our position as a top five performing water company for these
new measures
3.2.2 OUR 2020 TO 2025 PERFORMANCE COMMITMENTS CONTINUED
2020 TO 2025 BUSINESS PLAN
47
SECTION 3
Outcome
Measure
2025
performance
commitment
2040
ambition
Our 2017/18
performance
% change
from 2017/18
to 2025
Our water
supplies are
maintained
during
more severe
droughts
Risk of severe
restrictions
in a drought -
percentage of
population affected
0
0
0
Stable
We are targeting activities that mean we can cope with a drought twice as severe as
we can cope with now
Our water
supply
network is
resilient for
this generation
and the next
Unplanned outage
4.6%
4.5% New measure New measure
This is a new common performance commitment for the entire industry so we have
no company-specific or sector-wide comparative data to work from. We are aiming to
reduce unplanned outage by a further 2.8 million litres of water a day (-7.8%) by 2025
Company sites
protected from the
risk of flooding
92
N/A New measure New measure
We need to make sure our critical sites can withstand flooding from a 1 in a 1,000-year
event. We have 92 sites that need improving to prevent flooding. This represents a
68% increase in the number of schemes we will have to deliver compared to the 2015
to 2020 period
Event Risk Index
0
0
69.2
N/A
We will aim to have zero water quality events during 2020 to 2025
Average
water supply
interruptions, per
property, over three
hours
4 minutes
3.1 minutes 43.9 minutes
91%
This means a 91% improvement in our performance - from average to upper quartile
performance in the industry
Number of water
mains bursts per
1,000km of pipe
183
183
186
2%
The challenge is to maintain the low number of bursts on our pipes - despite the fact
we are actively putting more resources into finding and fixing more of them to keep
leakage levels as low as we can
Properties at risk
of low pressure
(per 10,000
connections)
0.5
0.5
0.5
Stable
We need to retain our position among the top five water companies for this measure
3.2.2 OUR 2020 TO 2025 PERFORMANCE COMMITMENTS CONTINUED
SOUTH EAST WATER
48
Outcome
Measure
2025
performance
commitment
2040
ambition
Our 2017/18
performance
% change
from 2017/18
to 2025
Our
environment
thrives, now
and into the
future
Greenhouse gas
emissions (kgCO₂
per million litres of
treated water)
58
58
288
80%
Reducing our greenhouse gas emissions by 80% means that by 2025 we will be
producing 230 kilograms less C0 2 per million litres of treated water - despite the fact
that water is heavy and the process of abstracting, treating and distributing large
volumes is an energy intensive process
WINEP completion
Completed
Completed New measure New measure
Water Industry Natural Environment Programme is a legal programme consisting of
environmental work around biodiversity, abstractions and catchment management
Number of hectares
of land enhanced
to increase
biodiversity
1,460
1,822 New measure New measure
This measure drives a 25% improvement in managed activity with third party
landowners, and on our own sites, to improve biodiversity
Number of hectares
of land privately
owned/managed
that has benefited
from improved
catchment
management
14,217
20,499 New measure New measure
We have six new performance commitments specifically around the environment.
Among them is this measure to drive a 50% improvement in engagement with farmers
and landowners to drive changes in practice and behaviour that reduces pollution and
protects raw water quality in streams, rivers and reservoirs and the wider environment too
Abstraction Incentive Mechanism (baseline million litres per day)
- Kingston
- Charing
- Itchel
0
0
0
0
0
0
No trigger
New measure
New measure
N/A
New measure
New measure
These sites will need to be controlled to produce less water so as to not harm the
environment
Percentage of
abstractors engaged
with to improve
catchment resilience
20%
40% New measure New measure
We will need to use our toolboxes to drive a sustained and positive change in behaviour
to meet our commitment
3.2.2 OUR 2020 TO 2025 PERFORMANCE COMMITMENTS CONTINUED
2020 TO 2025 BUSINESS PLAN
49
SECTION 3
PLAY AN ACTIVE ROLE REGIONALLY IN
RELATION TO THE IMPACT OF HOUSING
GROWTH ON WATER
What we will do
Develop a policy together with local stakeholders -
appreciating the balance of supplying water, the need for
society to ensure environmentally sustainable future water
resources, and also the ongoing support of the south east
region and its economic development
Respond to 100 per cent of all national, local and regional
authority consultations
Appendix 3
Responsible
business
3.3 OUR RESPONSIBLE BUSINESS COMMITMENTS
We recognise we are the provider of an essential service with a monopoly position.
With this comes a responsibility to make sure our actions and behaviours - as well as
our performance - underpin the high level of trust our customers and stakeholders
have in us as a business.
That trust is earned by being transparent in everything we do, and stand for. Trust
and transparency is also key to addressing the confidence and legitimacy issues that
the water sector currently faces.
That is why this plan sets out our ambitions for being known as a company that has
strong social and corporate ethics; and is proud to advocate and demonstrate what
those ethics are.
What we want to deliver for society
We want to make a positive impact for society and believe this will help us achieve
our vision - to be the water company people want to be supplied by and want to
work for.
Our business plan is about customer satisfaction responsibly delivered. The
outcomes in our plan come from a business that takes a long-term view and puts
both people and the planet at the heart of its decision making.
Alongside these we have developed a suite of 10 additional responsible business
commitments for key areas which customers and stakeholders have told us
represent what being a responsible business is. These are:
SOUTH EAST WATER
50
ENSURE FAIR PAY, REWARD AND RECOGNITION
FOR ALL OUR EMPLOYEES
What we will do
Ensure our executive salaries are reasonable and justifiable
Improve gender pay gap year-on-year
Achieve Gold Investors in People (or equivalent) by 2025
SUPPORT THE TAP WATER REFILL CAMPAIGN TO
REDUCE PLASTIC BOTTLED WATER
What we will do
Increase the number of refill-designated businesses within
our region
Run an annual hydration campaign in conjunction with Refill
DEVELOP A FUTURE GENERATION SCHOOLS
PROGRAMME ON WATER
What we will do
Increase water education activities to reach 10,000 children
by 2025
Upgrade our education materials for our key visitor sites at
Arlington and Ardingly
Work with local communities to develop an education centre
for new reservoirs and ensure these are included in our plans
Continue to build on our STEM ambassador programme and
run the Know h 2 ow awards annually - working in partnership
with the STEM Hub to promote this and encourage other
organisations to take part too
CREATE MORE PARTNERSHIP COMMUNITY
PROJECTS ON WATER USE AND VULNERABILITY
What we will do
Increase the number of community projects per year working
with universities
Increase the number of community projects per year working
with local charities
Develop a partnership project to look at water footprint,
beginning in 2020
2020 TO 2025 BUSINESS PLAN
51
SECTION 3
NATURAL CAPITAL ACCOUNTING
What we will do
We will adopt a natural capital approach to ensure we
value our impacts and dependencies on nature in the
decisions we make
RENEWABLE ENERGY MEASURES
What we will do
We will publish a range of supplementary metrics that
highlight the percentage mix of our energy sources and also
include information on our energy efficiency and the impact
of our land acting as a "carbon sink"
IMPROVING HEALTH, SAFETY AND WELLBEING OF
OUR PEOPLE AND COMMUNITIES
What we will do
We will report on our progress against our Thrive 365 strategy
Continue to report number of breaches of health and safety
regulations
TRANSPARENCY OF REPORTING
What we will do
Maintain our self-assured rating for our Company Monitoring
Framework (CMF)
Continue to report number of breaches of abstraction licences,
discharge consents and environmental permits
Continue to report number of pollution incidents
(category 1 and 2)
Continue to report number of compliance breaches of other
statutory obligations and licence conditions
Report on further vulnerability measures alongside our
performance commitments
Continue to report number of breaches of national security
obligations
SOUTH EAST WATER
52
3.4 HOW WE WILL REPORT ON OUR PERFORMANCE
AND RESPONSIBLE BUSINESS COMMITMENTS
Taking an open and transparent approach to reporting our performance is
fundamental to being a responsible business; it is also vital to maintain our
customers' trust and confidence in what we do and stand for.
We will report on our performance in the following ways:
Regular reporting to our Board and employees
quarterly updates on our website
quarterly reporting to our CCG
quarterly reporting to our investors
annual reporting through our Performance People and Planet report and
Annual Financial Report
annual reporting through our CMF
Along with these formal reporting routes we will provide regular updates to our
customers and communities via social media, press releases and our community
engagement activities as part of our engaging out loud approach to communicating
in future.
All these activities build on the improvements we have already made in the
monitoring and reporting of our performance. We have been classified as a self-
assured company via our CMF for the last two years and aspire to maintain this
position - not just to meet regulatory expectations but because we are proud of our
pure know h 2 ow and want to share that with our customers and stakeholders who
are also keen to learn more about water.
TRUSTED CORPORATE GOVERNANCE
What we will do
We will follow best practice on Board composition and
governance
We will not issue any new debt from the Caymen Islands
and will look to remove debt that is held there as soon as
practicable
2020 TO 2025 BUSINESS PLAN
53
SECTION 3
"
TO DELIVER
THESE TARGETS
WE WILL CARRY
OUT A RANGE
OF ACTIVITIES
THAT BUILD
ON OUR WORK
TO IMPROVE
CUSTOMER
SATISFACTION
SOUTH EAST WATER
54
4
WHAT WE WILL DO TO
MEET OUR PERFORMANCE
COMMITMENTS
4.1 Introduction
56
4.2 Our customers are happy
with the service we provide
57
4.3 Developers are happy
with the service we
provide to them
60
4.4 Our customers trust the
safety and quality of
their tap water
61
4.5 Leakage levels are
sustainable and supported
by customers
63
4.6 Customers are empowered
to reduce their water use
64
4.7 All the water we supply is
accounted for
65
4.8 Our water supplies are
maintained during more
severe droughts
66
4.9 Our water supply network
is resilient for this
generation and the next
67
4.10 Our environment thrives
now and into the future
70
2020 TO 2025 BUSINESS PLAN
55
4 WHAT WE WILL DO TO
MEET OUR PERFORMANCE
COMMITMENTS
4.1 INTRODUCTION
The performance commitments we have made in this plan have
been created with stakeholders and customers.
These support our ambition to not only measure our
performance with more traditional metrics but to introduce
more innovative measures, including new satisfaction measures
that are a natural evolution of our existing approach. This
ensures we remain incentivised to deliver even higher levels
of service.
Many of our outcomes and performance commitments are
focussed on areas which we know are the most important to
customers, particularly around supporting there in vulnerable
circumstances and the environment.
It is also why some of our outcomes also include areas where
we have committed to going beyond our more traditional role
of public water supply - for example we have committed to
engaging with other water abstractors with the aim of delivering
wider environmental benefits.
As well as being supported by customers and stakeholders,
collectively our outcomes and performance are the most
ambitious yet. They have been designed that way so we not
only improve the service our customers receive but also drive us
to innovate - as innovation is undoubtedly needed if we are to
deliver on our promises.
SOUTH EAST WATER
56
4.2 OUTCOME: CUSTOMERS ARE HAPPY WITH THE
SERVICE WE PROVIDE
Customer satisfaction remains the core theme of this plan but we have evolved how
we measure our performance of it in two distinct ways:
Measuring overall and segmented satisfaction among our customers
developing a suite of six new performance commitments specifically around
services to customers in vulnerable circumstances
Measure
Performance commitment in 2024/25
Customer experience measure
Achieve upper quartile peformance
Segmented satisfaction of
household customers
Global Advocates
Me, Myself and Mine
Busy Jugglers
Mindful Optimists
Living for Today
Careful Neighbours
4.5 out of 5
4.5 out of 5
4.5 out of 5
4.5 out of 5
4.5 out of 5
4.5 out of 5
Satisfaction of household customers
who are experiencing payment
difficulties
4.5 out of 5
Satisfaction of household customers
who are receiving non-financial support
4.5 out of 5
Satisfaction of household customers
who are on our vulnerability schemes
during a supply interruption
Target will be set in 2019/20*
Household customers receiving
financial support
65,000
Household customers receiving
non-financial support
60,000
Satisfaction of stakeholders in
relation to assistance schemes offered
by South East Water
Target will be set in 2019/20*
* we will be undertaking baseline surveys to set our performance commitments
for these new satisfaction measures, so they are in place for the start of the
2020 to 2025 period
SECTION 4
2020 TO 2025 BUSINESS PLAN
57
4.2.1 WHAT WE WILL DO FOR HOUSEHOLD CUSTOMERS
Our segmented satisfaction targets for 2020 to 2025 are based on ensuring all
customers are happy with the service and communication they receive from us; they
are customised to meet their expectations and go beyond the average customer.
To deliver these targets we will be carrying out a range of activities that build
on the work we have been doing around customer satisfaction since 2015.
These activities will be underpinned by our customer behaviour change toolbox
where will be using behavioural science techniques to deliver our performance
commitments.
The focus of our activities will be around the following.
Our culture
Building on our cultural change programme and our vision and values
embedding new customer segments into our business so that whether talking to
customers by telephone, email or face to face we can more easily identify their
different attitudes and beliefs and adapt our approach
extending the behavioural training to all customer-facing teams and include our
new customer segments in this training
Our insight and learning
New non-executive director led steering group to ensure our insight and
engagement approaches are strategic, coordinated and targeted to our
customers' priorities
implementation of a new dedicated Customer Insight Team that gathers all
engagement and learning - and systematically captures it in a new insight
hub - to ensure we continually test, learn, adapt and implement new ideas and
improvements and evolve and fine-tune our customer segmentation
development of a new knowledge hub for our business, based on Google search
methods, which ensures all teams are up to date with the latest information and
answers to common customer enquiries
Our business processes and services
Investigating what new services we can develop based on the differing needs and
attitudes of our customers - and helping customers in a more holistic way with
their use of water
understanding and producing demand management strategies at a regional level,
and sharing our approach to water efficiency using social norming techniques
How we communicate
Different communications so that our language and the information we provide
to customers is more targeted and effective
co-ordinated campaigns to customer segments using tailored messaging and
targeting techniques. This will help us particularly with campaigns around water
efficiency, preparing for winter, and high demand
adapting our communication approaches based on how customers choose to
interact with us and what they tell us is important to them
Appendix 16
Innovation
SOUTH EAST WATER
58
4.2.2 WHAT WE WILL DO FOR WATER RETAILERS AND BUSINESSES
One thing is clear from our ongoing and business plan-specific engagement with
water retailers and businesses - our flexible and open approach is supported and
welcomed. Business feedback has also given us insight to what their issues and
priorities are, and the role they expect us to play in supporting the retail market
and their own business-led aspirations. To ensure we play our part we have made a
number of commitments to the market, to water retailers and to businesses.
Commitment
Activities
To support
the
continued
development
of the
business
retail water
market
Improving data quality and accuracy
holding the % of void businesses below 8.1%
completing >90% of our market processes on time
providing a quarterly performance report for Retailers
and transparent annual performance reporting via our
Performance, People and Planet report and CMF
contributing to the development of market systems
and processes
To provide
an industry
leading
wholesale
service
for water
retailers
Providing technical support and advice including a range of
services and engagement approaches
simplifying tariffs and charges and ensuring credit terms
enable equal opportunity to access and compete
providing performance transparency through quarterly and
annual reporting
implementing a new Retailer Experience survey - target 10!
To ensure all
our business
customers
receive the
service and
support they
expect
Ensuring the level of service provided is the same regardless
of whether it is provided directly or via a water retailer
improving engagement and communications with business
customers
incorporating our business customer engagement into our
customer insight database
introducing greater water management support and
technical advice, to help business customers become more
resilient too - a key element of delivering our resilient
customer concept
SECTION 4
Appendix 9
Resilience in
the round
Appendix 4
Business retail
water market
2020 TO 2025 BUSINESS PLAN
59
4.3 OUTCOME: DEVELOPERS ARE HAPPY WITH THE
SERVICE WE PROVIDE TO THEM
The new developer experience measure (D-MeX) is a natural iteration of our current
innovative approach with household customers, which measures their satisfaction
with our service.
This new measure will provide developers with the opportunity to rate the service
they receive from water companies and see how that performance compares across
the sector.
Measure
Performance commitment in 2024/25
Developer experience measure
To achieve upper quartile performance
4.3.1 WHAT WE WILL DO
Our developer services activity for the 2020 to 2025 period will have a strong focus on:
Establishing a dedicated contact centre for all types of developers
fair and affordable charges that encourage house building and support the
economic growth of the region - while also ensuring current and future water
supplies are secure, sustainable and resilient to changing demands
having a service structure that:
is effective and efficient for all types of customers who may need to use
our services
ensures a level playing field for all
continues to evolve our listening and learning engagement with all customers
delivering new developments so we can meet their needs and expectations
is more innovative in partnering with new development customers to achieve
shared goals, for example around reducing demand for water
Appendix 5
Growth and new
development
SOUTH EAST WATER
60
SECTION 4
4.4 OUTCOME: OUR CUSTOMERS TRUST THE SAFETY
AND QUALITY OF THEIR TAP WATER
Our customers and stakeholders continue to have a strong focus on the safety and
quality of their tap water.
We have the same strong focus too, which is embedded in our drinking water safety
plans (DWSP) which assess all the risks to water quality from source to tap.
Using these tools we have developed three performance commitments to maintain
water quality.
Measure
Performance commitment in 2024/25
Number of customer contacts
about tap water appearance
(per 1,000 population)
0.79
Number of customer contacts
about tap water taste and odour
(per 1,000 population)
0.29
Compliance Risk Index
0
4.4.1 WHAT WE WILL DO
Appearance and taste and odour of tap water
The key areas of activity which will deliver the reduction in appearance
contacts include:
On our pipe network:
Flushing at least 10 per cent of our water network every year
adopting new ways of renovating our large water mains
using online water quality monitors, installed in strategic
locations, to gain real time understanding of sediment
movement and pressure changes in our pipe network
introducing a smart network monitoring programme
operational sampling programmes so we:
have a better understanding of metal concentrations in our
water supply zones
can identify water quality 'hot spots' to ensure our water
treatment works can deal with these issues
Appendix 6
Water quality
2020 TO 2025 BUSINESS PLAN
61
For our water treatment works:
Online monitoring at all our water treatment works with
additional alarms and shut down processes for critical
parameters
using innovative treatment solutions such as SeaQuest
targeting investment in our water treatment works
risk-based inspection and maintenance regimes for water
quality monitors
For our customers:
Increased customer engagement on water quality issues
through targeted communications, and using our customer
behaviour change and partnership toolboxes to drive greater
water quality resilience
Compliance Risk Index (CRI)
We have a robust risk assessment and risk management approach for all our systems
and processes. This is embedded into our DWSP. These risk assessments are updated
on a monthly basis with analytical results from our monitoring programme.
Our safety plans also incorporate information from recent water quality incidents
and the number of customer contacts. All this information is fed into our asset