17 October Indepen Brochure

The Indepen Forum Has the water company chicken that laid the golden eggs shuffled off its mortal coil? Could a new model for company ownership revive it?

Tuesday, 17 October 2023 ›National Grid offices, 1-3 Strand, London WC2N 5EH 6pm - 9pm

CONTENTS The 17 October Indepen Forum

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Chair and speakers

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Agenda & Participant list

3

About us: Indepen and the Indepen Forum

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Our team & Associates

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2023 Forum programme

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Past events

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The Social Contract Summit

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Supported by:

THE 17 OCTOBER INDEPEN FORUM

THE 17 OCTOBER INDEPEN FORUM

HAS THE WATER COMPANY CHICKEN THAT LAID THE GOLDEN EGGS SHUFFLED OFF ITS MORTAL COIL? COULD A NEW MODEL FOR COMPANY OWNERSHIP REVIVE IT? As Dieter Helm has argued in July 2023, the matter of finance for infrastructure investment is in the context of a fundamental feature of the UK economy. The rate of saving in the UK by households, companies and government is low by international standards and as a result the UK depends on attracting money from elsewhere, not just for investment but also for consumption as our imports greatly exceed our exports. He says As beggars, we can’t be choosy about who lends to us and on what terms.

Investment is a voluntary activity. We can continue to beg the foreigners or turn ourselves into savers. … investors have lots of potential opportunities to invest elsewhere. The obvious solution, while hugely unpalatable, is for the UK to stop being beggars: to live within our external balance of payments means, to save for retirement and almost all of our investment needs, to retain earnings, and to change the tax incentives on companies. The government would need to change its behaviour too, running surpluses not deficits. This is unpalatable because it will mean lowering the standard of living in the UK and paying higher taxes. We can be choosers only if we choose to save and live within our means.

This means there is a need to court overseas investors more effectively.

The BEIS Committee observed that the UK’s prospectus for investment in energy had deteriorated and that there was no competitive offer to ensure that the UK could continue to attract investment. Over recent years we have observed a similar decline in the attractiveness of the water sector to investors. Investors in Southern

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Water and Thames Water have taken a lot of persuading to inject equity into these companies to fund the backlog of expenditure needed to restore the resilience of the assets and meet future demands for capacity.

The investment proposition has declined further with public criticism of the water companies’ environment performance. The CSOs are not the only issue: leakage, supply interruptions, hosepipe bans, executive pay and dividend policies are all affecting the reputation of the water companies. From an investor point of view, for reputation read quality of earnings.

Southern and Thames are not the only companies affected. The latest Ofwat financial resilience report shows several companies’ credit ratings have fallen to their lowest levels, as rising interest rates on their debt, raised when real interest rates were low or negative and kept low by monetary policy and quantitative easing, start to bite.

When Philip Fletcher chair of Ofwat from 2000 to 2011 said that “the companies’ financial structures are of no concern to the regulator”, he could have added, “so long as they do not disadvantage customers”. He did not and the consequences are the high gearing and illiquid financial structures some of the companies have now. Up to a point, gearing can be said to be in customers’ interests, mainly for tax reasons, but the illiquid, highly geared structures of some water companies are unlikely to be of benefit customers.

At the same time there is extra pressure because some of the companies are not well run

s ome have underinvested in looking after their very large stock of assets - water is by some distance the UK’s most capital intensive sector and any backlog will take a long time and a lot of capital to recover the economic regulator is pressing the companies harder, not only to reduce gearing but also to do better on efficiency and performance the regulator is also pushing for improvements in board leadership and governance, which in some of the water companies has been woeful f uture demands on the services that we know about will result in the need for a greatly increased rate of new investment, not to mention demands that are as yet unknown, for example the consequences of lead in water pipes and “forever chemicals”.

The situation is unappealing, but those responsible are long gone, leaving a legacy for the incumbents on all sides – investors, companies, regulators, government and customers – to deal with and, if possible rectify.

Ways of making investment more attractive There are ways out of this situation but none of them are easy. We might put them under three headings: ownership models and owners, structure of the businesses and changes in the way the sector is regulated.

Ownership models and owners Ofwat believes that the conventionally owned and financed companies – i.e. those listed on the Stock Exchange United Utilities, Severn Trent and www.indepen.uk.com

Pennon – are better performers than those owned by private equity and infrastructure funds. So one possibility is to see if any of the latter can be re-listed.

Attracting new investors with risk and return appetites better aligned to a public service business like water. Institutional investors – pension funds life insurance companies might fit the bill. In the past EU regulation has limited such investments, but now …?

T he model of mutual ownership, which is present in Welsh Water, might be extended. This could be a model involving regional or local interests which is attractive for a service like water.

N ationalisation. This not being pushed by the main parties but there is public support for public ownership of water companies.

This could be linked with the need for regional involvement in the objectives and performance of the water businesses.

Structure of the businesses There may be scope to create value and improve performance by breaking up some of the companies. This has been discussed in the context of Thames, where analysts can see value in a geographical split, and Southern, where the value is less obvious.

I n an ideal world any restructuring of these companies would facilitate a rationalisation of the position of the water only companies in South East England.

Related to the last point, but not limited to it is the scope to add value by separating clean and waste water services.

More use could be made of the Thames Tideway Tunnel model, where a new regulated company was set up to provide and operate the tunnel. The approach is a form of project finance applicable to www.indepen.uk.com

major schemes. There is interest among investors in doing more of these projects and extending their scope. [Note to readers. We suggest this as a topic for a future briefing.]

Changes to the regulatory regime Ofwat could seek to make changes that would allow recovery of the excess dividends paid out historically, but it will find this hard to do at the same time as leaving the sector attractive to new investors1. Any such approach could only be introduced with respect to new investment. Even there it would be problematic as the sector needs £ billions of new equity most of which would have to come from outside the UK, but investment remains voluntary and the sector is not well-placed to attract it.

O fwat could reverse the primacy it has historically given to keeping prices down and agree substantial increases to make the required investment attractive. Sluggish real wages, the political timetable and the likely public reaction to price increases to pay for things they thought they had paid for already, make this route unattractive too.

If smarter regulation led to better performance and lower cost there would be headroom to pay for some of the things required of the sector without squeezing investors or hiking prices. This would be the sweet spot.

Taking serious aim at system issues and the massive allocative inefficiency in the system as it runs now and encouraging effective innovation could create considerable headroom for catch up on the assets and enhancement of the services. While there are proposals for how Ofwat could access this headroom, it has shown little sign so far of adopting them.

This is a serious situation for a capitalintensive industry that is already highly geared and has to be reliable as the basis of civil society. The timing is bad as all the other infrastructure sectors have big investment requirements as well. But there are options - plenty then for a new administration to consider including how to get realistic about the options.

Note on Thames Water’s financial position This has been much in the news. In reality, there was little or no reason to think that Thanes Water would become insolvent in the near future. It has substantial cash and a comfortable loan repayment schedule in the medium term. Even if the effect of high interest rates on the servicing of index linked debt were to threaten Thames’ solvency, the special administration provisions would preclude the need for any taxpayer bail-out.

In the event of a financial default, special administration means that the interests of customers rank before those of financial creditors. In effect the court sets up a new utility to take over the assets and undertaking of the old one and to continue its services and investments. The creditors and shareholders of the old business would get any surplus on sale of the business to new owners, in the unlikely event that there were funds left over.

It is interesting to speculate about where the insolvency scare came from. No one is saying. If by any chance it came from dis-satisfied Thames Water shareholders wanting to put the frighteners on Ofwat and the Government to relax regulatory pressures on Thames, then it did not work. Ofwat and the Government managed to avoid any hint of disagreement about this.

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CHAIR & SPEAKERS

CHAIR & SPEAKERS

CHAIR

SPEAKER

SPEAKER

SPEAKER

Iain Smedley, Global Chairman, Barclays Bank

Alan Sutherland, CEO, Water Industry Commission for Scotland

Susan Davy, CEO, Pennon Group

Mike Keil, CEO, Consumer Council for Water

Susan was appointed Group Chief Executive for Pennon Group in July 2020. Having previously served as Chief Financial Officer since 2015.

After being part of CCW’s Executive Team as Senior Director of Policy, Research and Campaigns for six years, Mike Keil is now Chief Executive.

Susan’s knowledge of the industry, coupled with her financial and regulatory expertise, has underpinned the development of Pennon’s strategy which has included the value creating acquisition of Bournemouth Water in 2015 and Bristol Water, as well as the successful Viridor disposal process, all of which she has led. In her 25 years’ experience in the utility sector, Susan has also held a number of other senior roles in the water sector, including at Kelda Water.

A physicist by training, Mike spent the first decade of his career at the Met Office working with weather and climate models. He led its middle atmosphere research group.

Chairman Power & Utilities EMEA Iain has over 25 years’ experience as a power and utilities banker.

Iain joined Barclays in 2010 and has worked on a variety of strategic advisory and financing transactions for power, utility and infrastructure clients in the UK and across Europe, including corporate and asset buy-side and sell-side M&A, joint ventures, dual-track M&A / IPO transactions and equity and debt financings.

Recent roles include advising National Grid on the acquisition of WPD, sale of NECO and sale of National Grid Gas; Pennon on its sale of Viridor and acquisition of Bristol Water; and Fortum on the stabilisation measures package for Uniper.

Prior to Barclays, Iain worked at Nomura (2009-10) and Morgan Stanley (1996-2008). Before becoming an investment banker, Iain worked as a consultant specialising in public sector restructuring, regulation and privatisation. He retains an interest in regulation and policy, and was a member of the Advisory Panel for UK water regulator OFWAT’s 2019 price review process.

Iain graduated from Clare College, Cambridge with a BA in History and Economics, and is based in London.

Alan has been Chief Executive of WICS since its establishment in 2005. He was previously Water Industry Commissioner, and was responsible for the merger of the three water authorities in 2002 that were in place in Scotland at that time. This change paved the way for the substantial improvements in efficiency and service that have since been delivered

by Scottish Water. Alan also worked with the Scottish Government to develop the regulatory framework, ensuring that each party had clear responsibilities and clarifying the regulator’s role as decision maker (rather than as government advisor).

Alan put in place a model to allow competition within the water and sewerage retail market for non-households, a world first at that time (2008).

Unswervingly committed to a customer-centric approach, Alan is working with sector stakeholders to engender greater candour transparency and collaboration. Alan believes in sharing experience and expertise and, through the Scottish Government’s Hydro Nation initiative, supports international capacity-building projects that facilitate the development of economic regulation and of more sustainable water industries.

Susan is a Non-Executive Director and Audit Chair of Restore Plc, a Water UK Board member, member of the Energy & Utilities Skills Partnership Council and was previously a member of the A4S (Accounting for Sustainability) CFO leadership network.

www.indepen.uk.com

Mike moved to Severn Trent Water in 2011, leading their work on climate change and resilience. During this time he wrote the business case for the £350m Birmingham Resilience Project.

Mike has been at CCW since 2017, leading their policy work, water company challenge and their extensive research programme. He oversaw CCW’s campaign work, including their Review of Water Affordability; the End Sewer Flooding Misery campaign and the Five Year Review of the Business Retail Market.

Mike is also one of the hosts of CCW’s Waterfall podcast, which was launched during the 2022 drought to help people understand the value of water and how they can use it more wisely.

Alan has extensive experience in management consultancy and in the investment banking industry. He previously worked as a management consultant with Bain and Company, was Managing Director of Wolverine CIS Ltd. Alan has an MBA and an MA from the Wharton School and the School of Arts and Sciences at the University of Pennsylvania and an MA (Hons) from the University of St Andrews.

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In 2007, he joined Ofwat as their Head of Climate Change and wrote their first policy statement on the topic. Mike oversaw the introduction of annual carbon accounting in the water sector and the inclusion of the cost of carbon into business cases as part of the regulatory framework.

www.indepen.uk.com

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AGENDA & PARTICIPANT LIST

PARTICIPANT LIST

Agenda 6.00 pm 6.30 pm 6.35 pm 7.00 pm 7.40 pm 7.43 pm 7.45 pm 9.00 pm

Registration and welcome drinks Chair’s opening remarks Speaker presentations Discussion and Q&A Chair’s closing remarks Final words from Indepen Debate close, with further networking over drinks and canapés Event close

Participant list Chair Speakers

Iain Smedley, Global Chairman, Barclays Bank Alan Sutherland, CEO, Water Industry Commission for Scotland Susan Davy, CEO, Pennon Group Mike Keil, CEO, Consumer Council for Water

Participants Mark Abrams

Founding Partner

Make Life Better

Martin Baggs

Non-Executive Director

Sagacity Solutions

Tony Ballance

Chief Strategy & Regulation Officer

Cadent Gas

Ian Barker

Managing Director

Water Policy International

Ann Bishop

Chair

Customer Engagement Group for UK Power Networks

David Black

Chief Executive

Ofwat

Matthew Blackmur

Strategy Manager

National Grid ESO

Mark Bottomley

Director of Development

Lower Thames Crossing

Greg Bradley

Partner, Energy and Utilities

PA Consulting

Tim Broyd

Chair in Built Environment Foresight, Honorary Professor of Civil Engineering, VP Institution of Civil Engineers

UCL

James Bullock

Strategy, Policy and Regulation Director

United Utilities

Alastair Chisholm

Head of policy and communications

CIWEM

Thea Hutchinson

Director of Company Performance and Price Review

Ofwat

Robert Light

Chair

Consumer Council for Water

Karma Loveday

Editor

The Water Report

Elliott Mannis

Chairman

London Bridge Capital

Jim Marshall

Associate Director, Water Advisory

AECOM

Peter Martin

Technical Solutions Director- UK

Binnies

Graham Mather

President

The Infrastructure Forum

Duncan McCombie

Chair

CEG for National Grid Energy Distribution

Sarah McMath

Chief Executive

MOSL

Gary Miles

Chief Executive

Gentrack

Patricia Milligan

Director, Head of Project Finance

Helaba

Sarah Mukherjee

Chief Executive

IEMA

Belinda Oldfield

Non- Executive Director

Northern Ireland Water

Mike Osborne

Managing Director, Asset Management

Infrared Capital Partners Limited

Jonathan Pacey

Principal Economist, Regulatory Enablers

Ofwat

Matthew Parr

Director of Strategy & Regulation

Tideway

Ian Pearson

Non-Executive Director

Thames Water

James Piggott

Partner

Baringa

Michael Redican

Chief Executive

MAR Consult

Adrian Rees

Partner

AlliumBlue

Darren Rice

Regulation Director

Anglian Water

Rob Scarrott

Performance and Regulatory Compliance Divisional Director

National Highways

Basil Scarsella

Chief Executive

UK Power Networks

Tom Sharpe

Kings’s Counsel

One Essex Court

Elliot Shaw

Chief Customer and Strategy Officer

National Highways

Helier Smith

Chief Executive

Jersey Water

Jean Spencer

Chair

National Water Resources Framework Steering Group

Keith Stephens

Group Corporate Affairs Director

National Grid

Graham Taylor

Senior Vice President, Infrastructure Finance

Moody’s Investors Service

Lila Thompson

Chief Executive

British Water

Bill Thompson

Director of Energy Regulation & Policy

KPMG

Guy Thompson

Group Director, Environmental Futures

Wessex Water

Emma Clancy

Chief Executive

Salix Finance

Miguel De Souza

Director, Project Finance London

Helaba

Mark Falcon

Director

Zephyre

Nasrine Fielding

Deputy Director, Regulatory Framework, Strategy & International

Better Regulation Executive

Rachel Fletcher

Director of Regulation and Economics

Octopus Energy

Maxine Frerk

Chair

SGN Customer Engagement Group

Lisa Gahan

Group Director of Regulation and Strategy

Pennon

Colm Gibson

Managing Director

Berkeley Research Group

Andy Green

National Infrastructure Commissioner/ Chair

Gentrack

Stephen Glaister

Professor Emeritus of Transport and Infrastructure

Imperial College London

John Hargreaves

Director

Billy Glennon

Chief Executive

VISION Consulting

David Elliott

Associate

Ashleye Gunn

Panel Member

Competition and Markets Authority

Abi Rowe

Team Administrator Associate Associate

Liv Walton

Director of Regulation & Strategy

Affinity Water

Caroline Warner

Chair

Customer Challenge Group at Affinity Water

Janet Wood

Editor

New Power

Martin Young

Senior Analyst-Energy, Utilities, Renewals and Waste Equity Research

Investec

Indepen

Duncan Hoggett

Partner

Odgers Berndtson

John Smith

Lee Horrocks

Director

LCH Executive

Laura Sweeney

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www.indepen.uk.com

www.indepen.uk.com

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INDEPEN AND THE INDEPEN FORUM Indepen Since 1990 Indepen has been a management consultancy working with senior people in investors, regulators, companies and supply chains in infrastructure and utilities.

While our work has evolved as the sectors have changed, our main modes of operation have remained, namely helping senior clients make sure that they devote enough time to allow them to

address the strategic decisions and tradeoffs they make inform their decision making by a com-

bination of horizon scanning, common sense reflection and engagement with internal and external parties and organisations keep their governance processes sharp

and effective from board level downwards throughout the organisation are able to justify and communicate their

decisions in a coherent and convincing way with evidence that is soundly based.

Having been long in the game, our senior people have a length and depth of sector and institutional memory that may be unrivalled in the industries in which we work.

One leading UK infrastructure business has been a client of Indepen client continuously since the mid-90s.

We complement the skills and experience of our core team with input from our associates who have themselves played senior roles in quoted and private companies and regulators, and as academics and from our partner businesses that have complementary skills and capabilities, including in artificial intelligence, machine learning and related analytics.

The Indepen Forum The Forum provides a place where new ideas and approaches can be developed, socialised and refined. The meetings of the Forum are private but not secret: they take place under The Chatham House Rule.

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OUR TEAM

Increasingly we observe that markets, business and their customers are ahead of governments and regulators in innovation and adapting to the multiple evolving challenges we are all grappling.

The Forum, and the associated series of summits we have hosted with The Water Report have a history of anticipating issues and policy developments.

The topics we have covered and the chairs and speakers who have honoured the Forum with their participation are summarised at https://indepen.uk.com/ where you can find summaries of the debates we have had.

Since 2018, Indepen and The Water Report have come together to host the Social Contract Summit, an opportunity for decision makers to explore how companies providing essential services infrastructure – water, energy, transport and communications – could provide more value to citizens, society and the environment. The agendas and speakers at the Summits can be seen at https://indepen.uk.com/the-summit/ The Forum is sponsored by a group of businesses all of which have been long term supporters. The sponsors have the opportunity to propose topics and speakers and to issue invitations to the events.

Most of the Forum debates take pace in central London but we are keen to include other locations and this year we have held events in Leeds and Edinburgh.

As well as the regular Forum events we convene and facilitate roundtables where smaller groups of interested parties can explore their thinking on a particular aspect of a Forum debate or any other issue which is central to the development of government and regulatory policy, particularly where change is needed.

CHAIR: Ann Bishop

DIRECTOR: John Hargreaves

›I have spent the last 37 years working in the regulated environment with boards and investors in water, energy, transport, telecoms, financial services, social housing and higher education.

›I am an economist and have been a

I am founder and Chair of Indepen, and lead the Indepen Forum, which was established in 1995 to bring together infrastructure businesses, policy makers, regulators, investors, customer representatives, the supply chain and others to debate topical and often controversial issues which might not otherwise be considered in such a diverse environment.

I am chair of UK Power Networks’ Customer Engagement Group, established in 2019 to ensure that the DNO’s business plan for 2023-2028 reflects the needs and preferences of customers now and in the future.

Before establishing Indepen, I worked for P&O, Chase Manhattan Bank, County Bank and the strategy group of Deloitte consultancy, specialising in the financial services and retail sectors.

I have previously served as a Board Member at Leeds Beckett University and Chair of its Remuneration Committee; Deputy Chair of Opera North; an Ambassador for Wellbeing of Women, the charitable arm of the Royal College of Obstetricians and Gynaecologists; a member of Ofwat’s Expert Panel; a Commissioner of the London First Infrastructure Commission; and an INED at Affinity Water.

ASSOCIATE: Bridget

Rosewell CBE, MA, MPhil, FICE, FACSS, FSPE

›Bridget Rosewell is an experienced director, policy maker and economist, with a track record in advising public and private sector clients on key strategic issues.

She chairs Atom Bank and the M6 Toll Company and is a non-executive for the UK Infrastructure Bank and Northumbrian Water Group. Among other roles, she has been a Commissioner for the National Infrastructure Commission, chaired DVSA, been Senior Independent Director for Network Rail and Chief Economic Adviser to the Greater London Authority.

She was appointed CBE in December 2018 and is also a Fellow of the Institution of Civil Engineers, the Academy of Social Science and the Society of Professional Economists. She writes on finance, risk and uncertainty as well as infrastructure and modelling validation.

She has worked extensively on cities, infrastructure and finance, advising on projects in road and rail and on major property developments and regeneration. She has advised on changes to planning regulation and TfL’s finances and has appeared at planning Inquiries.

I’ve worked in the water, energy, telecommunications and transportation sectors and advised government departments, regulatory and competition agencies and numerous investor-owned businesses in the UK and around the world. As well as serving infrastructure clients, I led the mergers and acquisitions team at Deloitte and worked with UK government agencies on areas of public policy including education, health, and social housing.

Just now I am advising investor-owned businesses in the UK on their regulatory strategies, helping them to access new markets and services, attract investment and deliver outcomes that meet the economic, environmental and social challenges they face.

ASSOCIATE: Dr Melvyn Weeks

›I am an Associate Professor in Economics at the University of Cambridge and a Fellow of Clare College and an associate of Indepen.

I have previously worked as Senior Economic Advisor to Ofgem. This work focused on the provision of advice relating to the benchmarking of costs for electricity companies. I have also provided advice to the regulator for the DPCR5, RIIOED1, RIIO-GD1 and RIIO-T1 price reviews. I prepared expert evidence for Ofgem in the wake of the Competition and Markets Authority (CMA) inquiry into a number of aspects relating to price setting during RIIO-ED1.

More recently, I have represented a gas company in providing evidence to the CMA in the area of cost assessment for RIIO-GD2, and I have worked with a distribution network operator, providing advice on a number of issues relating to RIIO-ED2 including cost assessment and flexibility markets.

I have advised Ofwat, Ofcom and other regulatory bodies on issues relating to incentive design, welfare effects of policies and econometric modelling. I have also carried out quality assurance of data and evidence on behalf of regulatory bodies – a recent example concerning the safety of smart motorways.

My key interests lie in micro-econometrics, particularly discrete choice models, modelling demand systems in empirical industrial organisation, revealed and stated preference models, model testing and evaluation, computationally intensive methods including machine learning, simulation-based inference and the bootstrap, and convergence within and across countries.

I am also adviser to the smart meter analytics platform company SMAP Energy and digital technology company Fetch.AI.

We welcome ideas for Forum and round table topics. Please contact John Hargreaves or Ann Bishop john.hargreaves@indepen. uk.com and ann.bishop@indepen.uk.com. www.indepen.uk.com

lecturer, a civil servant and have worked in management consultancy and in corporate finance teams. I start from the position that the questions are more important than the answer.

At Indepen I provide leadership and support on projects relating to markets and incentives, with a focus on statistics and econometrics. www.indepen.uk.com

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2023 FORUM PROGRAMME ASSOCIATE: David Elliott ›I have over 30 years’ experience in the utilities sector, primarily the water industry, at all levels including 10 years as an Executive Director at Wessex Water.

More recently I worked as Chief Innovation and Strategy Officer at Wessex Water helping them migrate to a modern and agile water service provider based upon an open-system model enabling Wessex to deliver greater customer and environmental value.

I am a systems thinker, and have particular interest and experience in how markets, through the use of digital business models, can encourage better system design. One of my key areas of specialism is how natural capital can contribute to some of our societal and environmental issues today, and how customers, as prosumers can contribute to better outcomes.

I have experience with a number of start ups including founding EnTrade, an exciting online trading platform for environmental services that enables businesses to collaborate on investments to improve environmental and societal outcomes. I have also served as Non-Executive Director at Flipper, an energy auto-switching platform and Albion Water – an independent water and sewerage services provider for new housing developments.

ASSOCIATE: Laura Sweeney ›I have worked in various industries including the legal, finance, retail and charity sectors.

In addition to running my own business in the events and services industry, I have also held roles as Legal PA to a Senior Partner, Marketing Executive, Development Officer and Retail Manager.

At Indepen, I apply my background in customer experience and events management to help manage the full programme of Indepen Forum events throughout the year.

TEAM ADMINISTRATOR: Abi Rowe

›I provide administrative support to Indepen directors and associates, ensuring that work is co-ordinated across the team and that internal communication is as effective as possible.

In the innovation and research space I recently served as a Non-Executive Director of UKWIR, specialising in water industry research and innovation.

I also manage the annual Forum planning cycle, ensure the Forum database is current and relevant and contribute to the organisation of Forum and Roundtable debates.

I am the founder of Business4Life, a leadership development programme involving setting up model businesses whose profits go to WaterAid.

My background is in project management, business development and customer service in client facing, commercial businesses.

19 January

18 April

All systems go! Social Contract Summit https://indepen.uk.com/the-summit/

“I’d do anything for love (But I won’t do that)” What will net zero do for customers other than cost them a lot of money?

›RSA London

21 February Penny wise - pound foolish?

Regulatory focus on squeezing network costs puts at risk getting the new networks we need to achieve Net Zero and make energy affordable and secure.

Chair: Basil Scarsella, CEO, UK Power Networks Speakers: • Graham Taylor, Senior Vice President, Infrastructure Finance, Moody’s Investors • Ben Wilson, Chief Strategy & External Affairs Officer at National Grid • Jane Dennett-Thorpe, Deputy Director, Net Zero Strategy, Ofgem

›The Stanley Building, 7 Pancras Square,

King’s Cross, London, N1C 4AG

08 March Mind the widening gap!

How can private and public investment interact to stimulate innovation in parts of the UK with untapped potential?

Chair: Johnson Cox, CEO, London Port Authority Speakers: • Lord Matthew Taylor, Chair of Kensa • Piers Williamson, CEO, Housing Finance Corporation • Louise Wilson, Joint Managing Director, Abundance

›The Stanley Building, 7 Pancras Square,

King’s Cross, London, N1C 4AG

18 May How to bake a bigger infrastructure cake without breaking too many eggs Do we need evolution or revolution of infrastructure policy and regulation?

Chair: • Tony Cocker, Senior Independent Director, SSE Speakers: • Matt Bevington, Practice Director, Global Counsel • Martin Hurst, Associate, Sustainability First • David Black, CEO, Ofwat (first respondent)

›The Stanley Building, 7 Pancras Square,

King’s Cross, London, N1C 4AG.

Chair • Councillor Susan Hinchcliff, Bradford Council Speakers: • Bridget Rosewell CBE, Non-executive Director, UK Infrastructure Bank • Ian Smyth, CEO, Electricity North West • Gareth Mills, Regulation and Strategic Planning Director, Northern Gas Network (first respondent)

›The Queens Hotel, Leeds

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www.indepen.uk.com

www.indepen.uk.com

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2023 FORUM PROGRAMME 21 June Crisis begets reform: serving the retail markets for energy How does energy retail market reform balance consumers’ needs, competition and regulation and maintain an investable market – all while meeting net zero?

Chair: • Jonson Cox, Chair, The Port of London Authority

Speakers: • Jonathan Brearley, CEO, Ofgem • Iain Smedley, Global Chairman of Banking, Barclays

Bank • Dame Clare Moriarty, CEO, Citizens Advice

›The Stanley Building, 7 Pancras Square,

King’s Cross, London, N1C 4AG.

18 July Refer, appeal or grin and bear it?

Comparing the “appeal” processes in infrastructure; are the differences justified?

Chair: • Colm Gibson, Managing Director, Berkeley Research

Group Speakers: • Thea Hutchinson, Director, Price Review, Ofwat.

• Natura Gracia, Antitrust & Foreign Investment Partner, Linklaters • Harold Hutchinson, Managing Director, Co-Head of Energy at Investec • Martin Young, Senior Analyst - Energy, Utilities, Renewables, and Waste Equity Research, Investec

›Berkeley Research Group, 8 Salisbury

Square London EC4Y 8AP

19 September For the times they are a changin’ Is the Government’s Strategy and Policy Statement for Energy Policy in Great Britain smart enough?

Chair: • Tony Ballance, Chief Strategy & Regulation Officer, Cadent Gas

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PAST EVENTS

Speakers: • Kayte O’Neill, Director of Transformation, National Grid • Basil Scarsella, Chief Executive, UKPN • Dermot Nolan, Director, Fingleton

2022 Forums

2021 Forums

16 February Scream if you wanna go faster! Is activism more effective than regulation at driving change in economic infrastructure?

19 January Save paradise – can new financing arrangements for nature-based solutions defeat the parking lot and the pink hotel

›National Grid Offices, 1-3 Strand, London

Chair: The Rt Hon the Lord Deben, Chairman, Climate Change Committee

17 October

Chair: Bridget Rosewell CBE, Commissioner, National Infrastructure Commission Speakers: Ed Humpherson, Director General for Regulation at the Office for Statistics Regulation James Walker, Non-Executive Director at Consumer Scotland

WC2N 5EH

New ownership models for water companies Has the water company chicken that laid the golden eggs shuffled off its mortal coil?

Could a new model for company ownership revive it?

Chair: • Iain Smedley, Global Chairman, Barclays Bank Speakers: • Mike Keil, Senior Director of Policy, Research and Campaigns at CCW • Alan Sutherland, CEO, Water Industry Commission for Scotland • Susan Davy, CEO, Pennon Group

21 April Asking the wrong people the wrong questions for the wrong reasons. Are we using the wrong information to understand what customers need and want?

26 April Have economic consultants hijacked energy and water price regulation?

Chair: Sir Ian Byatt, first Director General of Ofwat (1989 to 2000) Speakers: Mark Falcon, Director of Zephyre Andy Manning, Principal Economic Regulation Specialist, Citizens Advice Professor Tommaso Valletti, Head of the Department of Economics & Public Policy, Imperial College Business School Simon Wilde, Director of Analysis & Assurance at Ofgem

10 May Go to jail! Do not pass go! Do not collect £200! Do directors of licensed monopolies have more to think about and if so, what?

Chair: Christine Hodgson CBE, Chair:, Severn Trent Water Speakers: Michael Osbourne Investment Director InfraRed Capital Partners Ltd Jonson Cox CBE, former Chairman, Ofwat

26 May We’re on the road to nowhere. Come on inside. Who gets left behind in the migration to net zero?

Chair: Richard Nourse, Founder and Managing Partner, Greencoat Capital Speaker:s David Black, Chief Regulation Officer, Ofwat David Young, Senior Fellow, Broadway Initiative

16 February Groundhog Day: how can we create policy credibility to engender public support for paying for net zero Chair: Laura Sandys CBE, CEO, Challenging Ideas Speaker:s Sul Alli, Director of Strategy and Customer Services, UK Power Networks Tony Ballance, Chief Strategy & Regulation Officer, Cadent Gas Dermot Nolan, Director, Fingleton and former CEO, Ofgem

16 March Life in lockdown – has Covid taught us anything about evidence, uncertainty and communication?

Chair: Ann Bishop, Founder of Indepen and the Indepen Forum, Chair: of the Customer Engagement Group (CEG) for UK Power Networks and NonExecutive Director of Affinity Water Speaker:s Martin Blaxall, Director, Corporate Brand and Communications, AstraZeneca Ali Chegini, Director of Systems Safety and Health, RSSB Ed Humpherson, Director General for Regulation, Office for Statistics Regulation Ben Page, Chief Executive Officer, Ipsos MORI

20 April How ‘appealing’ is the utilities sector? What should the CMA and Ofwat learn from PR19 and what might this mean for RIIO-2?

Chair: John Penrose, MP for Weston, Worle & The Villages Speaker:s Maxine Frerk, Chair:, SGN Customer Engagement Group Ceri Jones, Chair:, WaterSafe Stephen Littlechild, Emeritus Professor at the University of Birmingham, and Fellow at Cambridge Judge Business School Angela Love, Director of Future Markets and Engagement, Elexon and Independent Chair:, ScottishPower RIIO2 Transmission User Group

›National Grid Offices, 1-3 Strand, London

WC2N 5EH

Chair: Trisha McAuley OBE Speakers: Keith Anderson, CEO, Scottish Power Sean Duffy, Chief Executive Officer, Wise Group Simon Parsons, Director of Strategic Customer Service Planning Scottish Water Alan Sutherland, CEO, WICS

21 November

7 July Give me land lots of land under starry skies above just don’t fence me in! Opening the gate to whole system thinking

22 June Up, down, round and round – rising up to the challenge of levelling up

7 September They tried to make me to go to Rehab.... Why regulators need to stop saying no, no no.

20 July Déjà-vu: why do megaprojects go wrong? How can we fix them?

Why bother with a calculator when you haven’t mastered the abacus Our proposition is that regulated infrastructure businesses lag behind when it comes to using artificial intelligence, advanced analytics and open data to further customers’ interests, despite the mountains of available and relevant data.

Chair: • Andy Green CBE, National Infrastructure Commissioner and Chair, Gentrack Speakers: • Anita Dougall, CEO of Sagacity Solutions • Matthew Little, Director of Innovation, Improvement and Information Group (3iG) at Northern Gas Networks.

• Devrim Celal, Chief Executive Officer, KrakenFlex Limited, Part of the Octopus Energy Group

›National Grid Offices, 1-3 Strand, London

WC2N 5EH

TBA in Central London

Chair: Bridget Rosewell CBE, FICE, MA, MPhil, Commissioner, National Infrastructure Commission Speakers: Dr Jeff Hardy, Senior Research Fellow at the Grantham Institute, Imperial College London Laura Sandys CBE, CEO of Challenging Ideas Chair: Colm Gibson, Managing Director at Berkeley Research Group Speakers: Tony Ballance, Chief Strategy & Regulation Officer at Cadent Gas Sonia Brown, Vice President of UK&I Government Engagement and Regulatory Policy at Visa Europe Stephen Littlechild, Emeritus Professor at the University of Birmingham and Fellow at Cambridge Judge Business School

20 September This ain’t no technological breakdown. Oh no, this is the road to hell. How to stop siloed transport policy becoming a cul de sac?

Chair:; Pauline Walsh, Non Executive Director, Angel Trains Speakers: Anit Chandarana, Lead Director on the Great British Railways Transition Team Elliot Shaw, Chief Customer and Strategy Officer at National Highways Christian Wolmar, transport writer and broadcaster

20 October We can’t go on together with suspicious minds.

How do we make collaboration for innovation meaningful and sustainable?

Chair: Gus O’Donnell, Chairman, Frontier Economics Speakers: David Black, CEO, Ofwat Colin Skellett, CEO, Wessex Water

7 November Model, model toil and trouble! How must we change the model that underlies economic regulation in the UK? Chair: Nicholas Pollard, Chair: of Tilbury Douglas Group Speakers: Ingrid Facius, Director at Facii Paul Ormerod, Director at Volterra Cathryn Ross, Strategy and Regulatory Affairs Director at Thames Water

31 January Indepen Forum New Year Reception

›The Indepen Forum New Years Reception www.indepen.uk.com

Speaker: The Rt Hon the Lord David Blunkett

18 May Who should pay to transform our environment?

Chair: Jonson Cox CBE, Chairman, Ofwat Speaker:s The Rt. Hon John Gummer, Lord Deben, Chairman, Committee on Climate Change

Chair: Bridget Rosewell CBE, Commissioner, National Infrastructure Commission Speaker:s The Rt Hon. Lord Blunkett Susan Davy, Chief Executive Officer, Pennon Group Martin McIvor, Research Officer, Prospect

Chair: David Elliott, Director, Indepen Speaker:s Howard Ashcraft, Partner, Hanson Bridgett law firm & Adjunct Professor Civil & Environmental Engineering, Stanford University Billy Glennon, Chief Executive Officer, VISION Consulting Nicola Medalova, Managing Director, National Grid Interconnectors Colin Nicol, Senior Advisor & former Managing Director of Scottish and Southern Electricity Networks

21 September We want it all and we want it now. Infra companies should invest more, but economic regulators worry they will make out like bandits. Discuss!

Chair: Dr Tim Stone CBE, Chairman, Nuclear Industry Association Speaker:s Filipp Gaddo, Head of Energy Economics and Regulation, Arup Steve McMahon, Deputy Director, Electricity Distribution and Cross Sector Policy, Ofgem Cathryn Ross, Strategy and Regulatory Affairs Director, Thames Water

19 October Nothing learned and nothing gained? All together now – collaborating across the infrastructure sectors and beyond to achieve Net Zero Chair: Dr Jeff Hardy, Senior Research Fellow at the Grantham Institute Climate Change and the Environment, Imperial College London Speaker:s Alex Plant, Strategy and Regulation Director, Anglian Water Bridget Rosewell CBE, Commissioner, National Infrastructure Commission Dipesh Shah OBE, Chair:, National Highways

7 December Well, it’s a marvellous night for a moondance! Solving problems to get to net zero

Chair: Rachel Fletcher, Director of Regulation and Economics at Octopus Energy Speaker: Neil Harris, Sustainability Strategy and Innovation Lead at Amazon Web Services

The notes of these discussions are available on the indepen website: www.indepen.uk.com/questions www.indepen.uk.com

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THE SOCIAL CONTRACT SUMMIT Introduction Since 2018, Indepen and The Water Report have partnered to host the Social Contract Summit, a forum for decision makers to explore how companies providing essential services infrastructure – water, energy, transport and communications – could provide more value to citizens, society and the environment.

2018 – Defining the social contract At the Summit’s inception in 2018, social contracting – and the wider idea that essential service companies should deliver more for society and the environment than demanded by their formal obligations or gifted by their charitable contributions – was not the mainstream conversation it is today.

Defining the sociAl contrAct

essential public services, private business and better outcomes for society A summit from

Against a backdrop of perceived failings in the delivery of essential public services, the 2018 Summit brought industry leaders together with regulators, politicians, investors and those representing social and environmental interests to address the fundamental question: how can private companies providing essential public services deliver better outcomes for society? suppor ted by

We also specifically explored and attempted to define the contribution a social contract between essential service companies and their investors on one hand, and customers through government and regulators on the other, could make to rebuilding trust in the industries that underpin our lives.

2019 – Value for all

Our 2019 Summit therefore focused on issues relating to public value delivery in the water sector, such as how megatrends like

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climate change, demographics and technology might impact future service provision, the role of regulation in public value delivery, governance considerations to embed public purpose within companies, the need for greater and more effective collaboration, and the role and nature of engagement with consumers and communities.

2020 – Public purpose in a pandemic In 2020, the Summit convened virtually to explore how water companies were demonstrating ‘public purpose in a pandemic’.

2020 SOCIAL CONTRACT TOPIC GUIDE

SUMMIT EVENT REPORT

As anchor institutions in their regions and with the PUBLIC PURPOSE IN A PANDEMIC privilege of providing an essential monopoly service, we looked at how water companies were supporting their communities, and contributing to strengthening the economy, enhancing the environment, as well as exploring how the experience of Covid-19 had affected the attitudes and behaviours of those they serve.

Indepen and The Water Report’s online 2020 Social Contract Summit considered the next steps for the water sector in demonstrating public purpose, in the wake of Covid-19. Over three sessions which ran on 3rd, 10th and 24th November, we looked at environmental, economic and social impacts and responses, and combined perspectives from sector leaders and young professionals.

etc.venues county hAll, Westminster • 6 november 2018

By 2019, the concept of social value had been enthusiastically adopted, particularly by the water sector where there was considerable progress to report.

NOTES

2019 SOCIAL CONTRACT

A summit from

Supported by

We considered what companies could do alone and what they needed agreement, support and partners for. Importantly, we discussed what lessons we might learn from this unique chance to break the mould and do things differently for future models of operation, regulation and policy.

2022: Whole systems go!

Against this backdrop, our Social Contract Summit considered whether a whole systems approach to collaborating on shared challenges across sectors and actors could offer a key to the deadlock of rising expectations and constrained resources.

information on the S U M M I T Further themes and issues we have

VALUE FOR ALL 5 NOVEMBER 2019 • CENTRAL HALL WESTMINSTER THE

A summit from

WATER

REPORT

WHOLE

SYSTEMS

GO!

Could a systems thinking approach deliver more for less in the face of a climate, nature and cost of living crisis?

EVENT INFORMATION

A summit from

S O C I A L CO N T R AC T

SUMMIT

19 JANUARY – RSA HOUSE, LONDON Supported by

explored is available at www. indepen.uk.com/ the-summit.

POLICY | REGULATION | COMPETITION

Suppor ted by

The event was held in RSA, London on Thursday 19 January. www.indepen.uk.com

www.indepen.uk.com

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NOTES

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NOTES

www.indepen.uk.com

www.indepen.uk.com

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Supported by