Institute of Water Conference Review

2 0 1 3 ANNUAL CONFERENCE r e v i e w

2013 Annual Conference Review

Nicola Sturgeon

‘Water for the future’ Chris Loughlin

Jonson Cox

Contents 3 4 5 7

President, Institute of Water

10 I can only regard this year’s event as a huge success and I hope all those who attended the conference and social programme enjoyed it as much as I did. I am delighted we attracted such great and interesting speakers and I’d like to express my thanks to them for their contributions as well as all those who gave up their time to hear their views and participate in the discussions.

‘Water for the future’ is a vast topic which is always at the forefront of our minds and I hope you agree there were some very interesting points raised by speakers and delegates alike over an enjoyable two days in Edinburgh.

Our first keynote speaker was Nicola Sturgeon, Deputy First Minister of Scotland, who gave insight into some of the leading issues surrounding the water industry in Scotland.

Nicola discussed the vision shared by the Scottish Government and Scottish Water for Scotland to become a Hydro Nation, what this entails and how it could be achieved.

She went on to discuss how the competition agenda is helping innovation, keeping pressure on prices and promoting efficiency.

Our second keynote speaker was Jonson Cox, Chairman of OFWAT, whose focus was on the next price review. Jonson said it is essential the industry retains its legitimacy by ensuring it has excellent standards of governance and transparency and also that it should act responsibly to ensure any outperformance is shared fairly between shareholders and customers.

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Overview | Keynotes Session 1 - Resilience Session 2 - People for the Future Session 3 - STREAM Poster Session Session 4 - Water Industry Evolution Session 5 - Customer Expectation Social Programme

Jonson explained that customers form the heart of our industry and there is room to improve the service they receive; it is paramount that they continue to receive appropriate communication so they understand the challenges already faced and the challenges which are to come.

Jonson highlighted that OFWAT is looking for the water industry to take the lead rather than be pushed by the regulator and that those companies which demonstrate initiative will be recognised.

The environment, climate change and resilience were all discussed in addition to financial sustainability, consequences of high debt, and what constitutes a fair rate of return.

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Session 1: RESILIENCE Session 1 brought together four eminent speakers to discuss the importance of resilience in allowing the water industry to overcome the challenges of the future.

Lord Chris Smith

Simon also suggested that technical competence is not the key attribute because this can often be learned ‘on the job’. Instead, standout applicants would be motivational people managers who can work with greater emotional intelligence.

Peter Simpson Lord Smith opened the session by painting a striking picture of the challenges currently facing the Water Industry. 2012 has been a year of volatile weather patterns, in which drought was followed by 9 of the wettest months on record. In addition, average river temperatures have increased by 0.6oC in the last 30 years, sea levels are currently rising at 3mm per year and Artic sea ice is regularly breaking records at its annual minimum extent. These factors are exacerbated further by population growth and urban creep, in combination with the quality standards of drinking water, river water and bathing water being tightened, and customers becoming increasingly intolerant of unreliable or poor quality of service.

Lord Smith stated that the Institute of Water will play a key role in tackling the industry’s challenges by helping people develop new skills and ideas to face future challenges and promote catchment, people and stakeholder management in addition to traditional asset management.

Paul Davidson

n Vision: Work with the end in mind. n Determination: Think big. n Interaction: Working with others to achieve more. n Relationships: Supportive and genuine. n Problem solving: Evidence based. n Organisation: Planning workload. n Self-confidence: Make the difficult decisions.

Simon Cocks

Examples of this resilience in practice are the ability to recover processes, back-up of data systems, information systems and communication systems. Also, the resilience of suppliers is critical because a water company can only be as resilient as its weakest link.

Simon Cocks spoke of the need for water companies to reconsider the qualities looked for in prospective employees. He questioned whether the water industry is as good with managing its people as it is at managing technology and infrastructure.

The industry possesses an aging workforce with extensive knowledge and expertise and thus the future success of the industry is dependent on companies being able to recruit new people with the required talent. In future the attributes required in the water industry will be;

Paul Davidson presented the importance of personal resilience; a person’s ability to perform effectively under pressure and recover from difficult situations. He described the “7 Factor Resilience Framework” as a means of ensuring personal resilience, comprising;

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Peter Simpson’s presentation “How resilience for tomorrow starts today” looked at the more traditional viewpoint of resilience.

Anglian Water’s holistic structure for resilient enterprise defines resilience at a number of levels within and without the organisation.

For example resilience was considered within strategy and leadership, organisation and people, processes and systems, infrastructure, local authorities etc.

n Excellent people management skills. n New insights and capability to challenge the status quo. n Flexible commercial thinking. n Social engagement skills. n Understanding of our interface with energy. n Greater creativity.

Communication with customers is key due to the important role they play in helping companies remain resilient. 95% of customers surveyed stated they make some form of effort to conserve water as a result of Anglian Water’s “Love Every Drop” campaign.

In summary, resilience is certain to remain a key issue for companies as the industry moves in to PR14. As the challenges ahead evolve and become better understood the innovation, creativity and leadership of the industry will be critical in ensuring that service to customers continues to meet expectations.

Written by

Richard Jones Rising Star

2013 Annual Conference Review

Session 2: People for the Future People are our most important asset; to thrive in the challenges facing the water industry and be able to seize opportunities to provide an excellent service delivering safe drinking water and sanitation to consumers, engaged and skilful employees are essential.

Professor Jeni Colbourne MBE (Chief Inspector, DWI)

Jeni highlighted that people are what really makes a difference to being able to provide safe drinking water.

Her presentation focussed primarily on the new Drinking Water Regulation Training and Development Scheme. The DWI has been trialling a six month scheme with Anglian Water to develop skills in industry staff by working as inspectors. The experience of working on real cases should allow them to take better regulatory practices and new ideas back to their company. This will help spread new ideas and best practice, instilling regulatory champions in the industry, making the companies more effective at self regulation. It benefits the industry by providing scientific staff with a stronger and wider regulatory awareness to support the vital role of delivering safe, clean drinking water to consumers. The individuals gain a broader knowledge and skills such as the ability to constructively challenge and communicate complex technical issues in a simple way. This in turn will ultimately benefit consumers by improving the ability of companies to provide safe clean drinking water.

Professor Chris Jefferies, Dr Robin Sloan & Chris McCreadie (University of Abertay Dundee)

This presentation showcased a new tool being developed to help communicate complex interrelated flooding issues. The WaterTown software models the flow of surface water in cities for non specialist stakeholders (e.g. planners, politicians and the public) to enhance engagement and communicate the issues more clearly than traditional models, leading to better informed decision making. The software acts like a game, tracking and scoring choices that are made by the user and showing the downstream effects of interventions with high quality animation. The team has used games technology to make the subject more engaging and fun. Many engineering and water industry issues are very complex, whereas standard

ways of communicating tend to only express a single issue clearly. In a world where technology rapidly becomes outdated, it is essential that the water industry remains up to date utilising all types of new tools for employee development and stakeholder engagement with consumers.

This is particularly relevant with the next generation interacting so heavily on social media and becoming more familiar with learning via methods such as this; gaming or online rather than formal training.

Matthew Wright

(Chief Executive, Southern Water) Matthew discussed how the next 10 to 15 years will undoubtedly bring new challenges and opportunities to the way we work in the industry. Common themes today include changing of work life balance, flexible working patterns, flexibility in jobs and careers, shortage of traditional skills, increased use of IT and social networks changing how we work and communicate.

People are the future; companies must value people and make them feel valued in order to attract and retain the best staff. Generation Y (loosely the age group born between 1980 and 2000) are believed to be much more likely to seek change and challenge conventional ways of thinking. The water industry must enhance its employee development in order to attract the top employees and hence have a successful company in the future. There are four key areas of people management to focus on for future success: Staff engagement. Employees who feel they have a stake in the business, or that they are doing something worthwhile are 87% less likely to leave the company. It is likely that managers will be required to lead more than manage in order to motivate their teams.

Diversity. Diverse teams with different knowledge, background, skills and experience tend to perform better, leading to better company performance. This includes trying to encourage more women into traditionally male roles, both in the field and in the board room.

Written by

Roxanna Snooke Rising Star

Innovation. New divergent thinking should be encouraged; many ideas will not be worthwhile, but 5% will be game changing. Mavericks should not be avoided when considering candidates.

Innovation should not be a special occurrence but must be embedded in day to day activities.

Involvement of the next generation. They are likely to prefer not just new technology and social media communication, but also shifts in working culture. This could include: shorter, more casual meetings; more flexible job role changes; more egalitarian open offices with a high degree of collaboration; and opportunities for volunteering.

Susie Golics

(Employee Development Consultant, South West Water) Giving an excellent presentation as the Young Speaker in this session, Susie demonstrated how we can use the powerful impact of WaterAid to inspire our employees and provide them with opportunities for development. Susie saw first hand the beneficial impact WaterAid has after being selected to take part in a supporter’s trip to Zambia in 2012.

Through a series of photos and video clips we were introduced to some of the families she met. In Haboombe Village, where WaterAid was in the pre-intervention stage, water was collected from a stream which was milky coloured, stagnant and used by livestock as well. What shone through was the local peoples’ ambition, resilience and resourcefulness in difficult circumstances. This was contrasted with Mwavali which received help from WaterAid in 2007: there is now a water pump in the village and toilets for every household. The singing and dancing in the video showed how much they valued the clean water.

These trips can motivate and engage employees, giving them a more powerful connection and appreciation of the water industry’s role and how we can play a part in the wider community.

Ben Redwood Rising Star

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2013 Annual Conference Review

Session 3: STREAM POSTER SESSION

Sponsorsed by

The Annual Conference and Exhibition provides an ideal forum for the STREAM Industrial Doctorate Centre to showcase the research being undertaken by its Research Engineers.

It is also an excellent opportunity for the Research Engineers to test their ability to communicate their work to a knowledgeable and often challenging audience. The experience can be rather unnerving but also highly rewarding, improving confidence in both research findings and their value beyond the lab / field trial. Beyond the immediate benefits of the poster session, the Research Engineers also appreciate the opportunity provided by the event to extend their professional network and develop an appreciation of the changing context for their work.

The posters are prepared by Research Engineers in their third year of EngD registration and reflect the broad range of challenges facing the sector. This year's posters covered topics as diverse as metaldehyde removal, designing effective customer engagement activities, catchment management and the winning entry: managed aquifer recharge.

The winning poster was presented by Mital Pindoria. Mital attained a BSc in Environmental Science at University of Nottingham and her interest in the aquatic environment led her to

pursue a postgraduate degree in Environmental Technology (water management option) at Imperial College London. This offered the opportunity to understand how the water industry in the UK works, the challenges it faces and potential opportunities. Mital did a thesis on water footprints and the potential to incorporate water stress into the water footprint methodology, which raised her interest in water resource challenges. The EngD provided Mital with the perfect opportunity to collaborate with the water industry to produce implementable solutions to water resource challenges.

The Anglian region is one of the driest in the UK and, as the region develops further and population and industry expand, there is increasing pressure on the current water resources. Demand for water is increasing while the supply is reducing due to climate change which reduces the reliability of water availability. Furthermore new regulations have led to a reduction in current abstraction licences to protect the water environment. Approaches to increase efficiency of water use and of water treatment and distribution have provided some relief to the increasing demands, however demand management can only go so far, and as the population and industry continue to grow, other options need to be explored.

Managed Aquifer Recharge (MAR) is the storage of water in an aquifer for later use. It uses

existing space in underground aquifers and can provide storage capacities similar to reservoirs at a fraction of the social, environmental and economic cost.

The main aim of this EngD project was to plan and design an MAR scheme for a suitable site within the Anglian region and to develop a model to enable a better understanding of risk posed to the environment and the injected water during recharge.

About STREAM The STREAM programme's ambition to recruit, train, and retain outstanding graduate students has delivered early success in terms of the quality of graduates attracted to the programme and industry satisfaction with the research being delivered. These successes are principally due to the continued collaborative commitment and research excellence of the five collaborating universities as well as the industriousness and enthusiasm of the Research Engineers. With between 10 and 15 new Research Engineers starting the programme each year we intend that the STREAM poster session will become a regular fixture at the Institute of Water Annual Conference and continue to showcase leading edge research by the sector's next generation of research and engineering professionals. For more information about STREAM and details of the Research Engineers and their projects visit www.stream-idc.net

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2013 Annual Conference Review

Session 4: WATER INDUSTRY EVOLUTION There could not have been a more relevant and inspiring set of presentations to examine Water Industry Evolution: Building resilient networks through open architecture, transforming Scotland’s ailing water sector into an industry leader, empowering people to innovate and an anecdotal view of the history of the industry.

Steve Mogford

Chief Executive Officer, United Utilities Steve Mogford set the scene by explaining how it is an interesting time to think about evolution of the industry with the Water White Paper being mentioned in the Queen’s Speech, on-going dialogue about retail competition and upstream reform.

With climate change being the key driver for evolution, the need to manage increasingly frequent extreme events differently was emphasised. With restricted funds we need to be able to build more resilient and flexible infrastructure; to establish open architectures.

Citing ‘plug and play’ as an example whereby companies could call on solutions outside of their core capabilities as and when required to ensure reliable service provision in times of stress.

The need to look at lessons from the droughtprone areas of the USA was suggested, where companies are trying to increase the acceptability of using wastewater as a potable source. In addition, the industry needs to embrace the requirement for an evolving skill set of people. The presentation concluded by reaffirming the need to open our minds to open architecture solutions and third party contributions whilst aiming to offer customers the same high level of service as that of other industries. We need to grab opportunities for our benefit and in doing so perhaps deliver even greater benefit for our customers.

Douglas Millican

Chief Executive, Scottish Water Douglas Millican presented the remarkable evolution of the Scottish Water industry since the creation of Scottish Water in 2002. At the point of merger, the regional water companies were inefficient and offered low value to customers. Since then Scottish Water has emerged as a leading figure in the UK Water Industry.

Scottish Water set out a vision to become Scotland’s most valued and trusted business. To achieve this, the company has centred attention on engaging its people and driving efficiencies.

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Research was presented demonstrating a strong link between engagement and performance.

Encouragingly, over 70% of Scottish Water’s people now feel fully engaged. The SW1 Community scheme has helped this. The forum brings together the leadership team from across the business and has become a group which people aspire to be part of.

Douglas explained how a dramatic improvement in customer experience has been achieved by not just understanding what customers need but also what they want. He concluded with the message that we must evolve as our customers’ expectations continue to grow and we must, as an industry, build customer trust wherever we are in the UK.

Ben Tam

Operational Development Scientist, Anglian Water Ben Tam refuted the message that the Water Industry is not innovative enough by reflecting on examples of how innovation has been used to meet the recent challenges of drought, flooding, population growth and spiralling energy costs.

The audience was introduced to the concept of Prevention Motivation and Promotion Motivation using the Team GB cycling team to demonstrate how Promotion Motivation can drive performance improvements. The team used the Marginal Gains Principle to achieve 1% gains across the board by breaking down influences on performance into key components and looking at how each part could be improved. Ben then explained how this can be applied from source to tap.

Anglian Water are employing this principle, although perhaps unconsciously, with their new Get Active campaign which in part encourages people to step away from their desks and go for a 20 minute walk at lunchtime. The aim of which is to improve their health and performance.

Before concluding the presentation, Ben put forward the idea of applying health and safety near miss reporting in an operational context, explaining how an operational near miss system could be introduced to proactively prevent DWI reportable events. A great example of how an old idea could evolve into an innovative solution.

Robert Miller-Bakewell

Senior Independent Non-Executive Director, RPS Group From an investment perspective, Robert MillerBakewell is one of the most knowledgeable people in the industry. He shared with the audience anecdotes, presenting the changes he has observed in the industry. Robert witnessed early on a project which still today provides a valuable lesson in the need to take a long-term perspective with investment decisions. The project was Kielder Water, planned in the 1960’s to supply Newcastle’s industries. By the time the reservoir was completed in 1975, the traditional heavy industry had declined leading it to become an infamous white elephant.

Robert described how the formation of water authorities initiated the catchment management based approach that we have today and how privatisation opened the doors to foreign investors. Moving to a future perspective, a key challenge was presented as being how to value water. Robert concluded with a sobering message of the need to view water resources today in a global context.

Highlighting the risk that water scarcity poses to the economies of China and other leading countries and emphasising the necessity for us to share our technologies and experience with the rest of the world in order to help meet such challenges.

Q&A Questions focused on how to establish a culture to drive change. The panel concurred that the industry must look abroad for ideas, specifically to the Middle East, Australia and the southern USA where they are already dealing with severe water stress.

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2013 Annual Conference Review

Session 5: Customer Expectations for the Future

The final session of a conference which had centred on the future of the industry, focussed on customer expectations, with issues including retail competition, value for money and affordability discussed by an eminent panel.

The panel comprised Tony Smith, Chief Executive of Consumer Council for Water, Douglas Millican, Chief Executive of Scottish Water, Alan Sutherland, Chief Executive of Water Industry Commission for Scotland and Richard Barton, Retail Services Manager for Sembcorp Bournemouth Water and Institute of Water National Chair.

Competition Douglas Millican described five years of retail separation and new entrants into the Scottish market this year as being in the best interests of customers. While Richard Barton expressed concern that smaller businesses may find themselves on companies’ default tariff, without the protection of the Service Incentive

Mechanism and unwanted by retailers due to their higher debt risk, Alan Sutherland cited the second largest retailer in the Scottish market, which expressly targets companies of this sort using a web-based service model to deliver best value for money. Both Alan and Douglas Millican urged companies to fully engage in the development of the English market. “Ready or not, here it comes” was how Alan characterised the 2017 timetable for market opening, a clear message for companies.

Value Tony Smith highlighted recent research showing that a third of water customers were not happy with the value for money provided by their water company. This problem is significantly more acute for South West Water, where satisfaction is as low as 40%, an issue driven by perceived unfairness due to price rises in the 1990s that has since resulted in direct political intervention. Tony urged companies to stop thinking in terms of customers’ reluctant willingness to pay and consider what they actually want. Alan Sutherland issued a stark warning about customers’ expectations and perceived high returns on shareholders’ investments in the industry, saying “either we fix it now, or it will be fixed for us”.

Affordability Sonia Brown, Senior Director at Ofwat observed from the audience that welfare reforms currently being implemented by the Government would see falling incomes for many households, and described affordability as being “one of the biggest issues for companies in the price control”. Although she believes that the Government has been clear in its guidance through the Strategic Policy Statement for Ofwat, Alan Sutherland said he “doesn’t envy Ofwat” and believes that social cross-charging is an issue for government. Tony Smith sees social tariffs as a tricky area, and that without a parliamentary mandate, the help that can be provided will always be limited as customers are generally not prepared to accept any more than a modest cross-subsidy.

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2013 Annual Conference Review

2013 Social Programme

President’s Dinner

Saint Gobain Evening

Held at the historic Assembly Rooms in Edinburgh, the 2013 President’s Dinner saw a number of important Institute of Water accolades awarded including The National Innovation Awards, The CPD Award, The President’s Cup, the WaterAid Outstanding Achievement Award, and the Allen Bolton Award.

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The 2013 Saint Gobain Evening was held at the Ghillie Dhu, a unique venue based in Edinburgh city centre. The venue is a converted church and played host to a murder mystery evening and a traditional Scottish meal.

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The winners were: 1

NATIONAL INNOVATION AWARDS

1st Ferret Technology – Ferret Leak Location System 2nd Morrison Utility Services – Ferrule Extraction Tool 3rd Grontmij – Brickyard Lane SPS

2

CPD AWARD

Winner Ashley Moule, Welsh Area Finalist Ben Tam, Eastern Area Finalist Jon Cannon, Welsh Area

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3

WATERAID OUTSTANDING ACHIEVEMENT AWARD

Geoff Aitkenhead

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ALLEN BOLTON AWARD

George Irvine, Northern Ireland Area

5

PRESIDENT’S CUP

Welsh Area n The total raised for WaterAid from the Saint Gobain Evening and President’s Dinner Raffle was £3760.

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