Turning on the UK's Skills Tap

TURNING ON THE UK’S

SKILLS

TAP

in association with the Social Mobility Pledge

Rt Hon Justine Greening MP Former Secretary of State for Education

Like for many people, when I was growing up in Rotherham, my parents lived very close to where their parents lived. I grew up with my grandparents being just round the corner. I always knew that it would be hard for me to stay where I grew up if I was to reach out for the opportunities that I really wanted.

But people shouldn’t have to move miles away from their families. That’s how it was for me, and worst of all that’s still how it is today. This has to change. Opportunities have to be on people’s doorstep.

If we’re going to make the most of ourselves as a country, and make Brexit a success, then we have to make sure every person and every place is fulfilling its potential and to make sure that social mobility and getting on in life isn’t defined by geography.

We all know that talent is spread evenly across our country; but we sadly also know that opportunity isn’t. Some companies are working hard to change this.

Severn Trent, a FTSE100 company that provides water services for the Midlands Region, is a fantastic example of a company that provides local job opportunities and boasts a first-class apprenticeship scheme that promises young people a real chance to get on in life, and earn a living while they learn a skill, towards a career they can have for life.

Under the excellent leadership of its Chief Executive Liv Garfield, Severn Trent is now providing more jobs and apprenticeships locally than ever.

But the work of companies like Severn Trent in providing apprenticeships and job opportunities

is so much more important than just job numbers and statistics. Apprenticeship opportunities with the training they provide are crucial in tackling the skills deficit the United Kingdom now faces.

This is more important than ever because when we tackle the skills gap we tackle the opportunity gap. By up-skilling a whole generation of young people we can upgrade social mobility too. This is how we build a Britain that is fit for the future and a Britain that works for everyone.

So we need to make a new offer to our young people – a universal offer on opportunity, so that everyone can reach their potential, regardless of their background or where they live.

Britain’s economy might be the closest it has been to full employment since the early 1970s, with the rate of unemployment now at 4%, but companies are still finding it harder to hire the right workers.

Businesses are the solution to social mobility problems across the UK, and just like Severn Trent is doing in the Midlands, it is up to businesses to step up and provide local apprenticeship opportunities wherever they’re based.

With over 27 million people employed in the private sector as a whole, across many of the 5.7 million private sector businesses in the UK, from large corporations to SMEs. The Social Mobility Pledge represents over 2 million of these employees, and with companies like Severn Trent leading by example, we will continue to share social mobility best practice of businesses across the UK for the most effective programmes and efforts to be scaled to benefit the many.

Rt Hon Justine Greening MP Former Secretary of State for Education

Liv Garfield

Chief Executive, Severn Trent

1. INSIGHT SUMMARY Severn Trent is one of the country’s leading businesses in proactively enabling social mobility both internally and across the sector. It is a company that recognises the vital importance of providing apprenticeship opportunities to young people and promoting ethical corporate operations in its supply chain.

Severn Trent is also one of the largest companies in the United Kingdom, being a FTSE100-listed business that last year distributed 1.6 billion litres of drinking water to over 8 million people through a network of 49,000 kilometres of pipework1. The scale of the company is put into perspective when this figure is combined with the 94,000 kilometres of sewage pipework - enough to go around the world three and a half times2. With this scale comes the ability to make a real impact.

At the heart of all Severn Trent’s operations is a culture that ensures corporate and environmental

sustainability. That is why Severn Trent introduced a Corporate Responsibility Framework which is ambitious in the company’s aim to deliver the commitments of a leading socially responsible business that truly has a positive impact on the local communities and people it serves. The Framework contains two major ambitions. Firstly, to make the Severn Trent region the most water efficient in the UK. Secondly, for the company to play a leading role in keeping the Midlands’ rivers cleaner and healthier.

Responsible business practices are an integral part of Severn Trent’s business strategies, corporate operations and everyday services.

Given its scale, Severn Trent is also able to use its influence to make a meaningful difference through the supply chain.

1 Severn Trent plc (2018). Annual Report and Full Accounts 2 Ibid

Neil Morrison

HR Director, Severn Trent

That is why Severn Trent has committed to guaranteeing its supply chain is ethical and that their suppliers adhere to the same ethical standards the company has. Severn Trent ensures all suppliers make a modern slavery and human trafficking statement that they do not tolerate modern slavery and human trafficking in their businesses.

There is also much being done internally within Severn Trent to ensure that its own employees, and future prospective employees, have the best opportunities to prosper and have fulfilling careers. Severn Trent understands that any business is only as good as its people, and that’s why people are at the heart of everything the company does.

Liv Garfield, Chief Executive of Severn Trent, has ambitious aims in boosting social mobility both

within Severn Trent, across the Midlands and the entire country; and that’s why Severn Trent has, under her leadership, partnered with the Social Mobility Pledge.

The Social Mobility Pledge asks companies to commit to three key obligations. Firstly, forming partnerships with schools or colleges to provide coaching through quality careers advice, enrichment experience and mentoring to young people. Secondly, a commitment to providing access through work experience and apprenticeship opportunities. Thirdly, ensuring fair recruitment practices, which promote a level playing field to people from disadvantaged backgrounds or circumstances, such as the use of name-blind and contextual recruitment practices to avoid any form of discrimination within the process.

While the United Kingdom is facing a skills gap, with the supply of skilled labour increasingly unable to keep pace with demand, Severn Trent is proud to deliver on supporting the UK skills economy through its first-class apprenticeship scheme.

According to recent findings, more than threequarters (79%) of businesses expect to increase the number of higher-skilled roles in the coming years, yet two-thirds (66%) of the same businesses fear that there will be a lack of sufficiently skilled people to fill vacancies3. Across the UK, not enough is being done to address this significant and growing skills gap, which makes the work of companies like Severn Trent and Chief Executives like Liv Garfield all the more important.

Addressing the skills gap will become the policy issue for the upcoming generation. It is widely accepted that improving social mobility is one of

the biggest challenges the UK faces. Up-skilling the workforce and addressing this skills gap will be a key part of the solution, and one Severn Trent is pioneering. These efforts can be adopted and scaled across not only the utilities sector, but private sector and organisations of all shapes and sizes.

Businesses like Severn Trent have the potential to make a transformative effect in boosting social mobility and tackling the skills gap. If properly scaled, this approach can benefit many of the over 27 million people employed in the private sector as a whole, across many of the 5.7 million private sector businesses in the UK, from large corporations to SMEs4.

3 Confederation of British Industry. (2018) ‘Educating for the Modern World,’ CBI/Pearson Education and Skills Annual Report 4 Office for National Statistics (2018), ‘Public and private sector employment,’ 11 December Publication

2. SOCIAL MOBILITY THROUGH APPRENTICESHIPS With the skills gap being one of the key impending barriers to better social mobility, apprenticeships are a crucial part of the solution.

Apprenticeships are a vitally important way to help young people get experience in the work place, learning new skills, while earning and contributing to their workplace.

Apprenticeships and training increase the breadth and diversity of skills in the economy, as well as creating opportunities for millions of people across the country every year.

Apprenticeships increase employment prospects, productivity of workers, and increase monetary returns for individuals over their working lives.

One of the best ways to measure the effectiveness of apprenticeships in boosting social mobility is by looking at the outcomes.

The UK Government has researched this and produced figures that show progression and outcomes in apprenticeships across the country.

These figures have assessed apprenticeship levels and salary outcomes, which show that progression to level 2 apprenticeships has the

salary potential of between £48,000 and £74,000; between £77,000 and £117,000 for level 3; and £150,000 or more for those completing an apprenticeship at level 4, over their lifetime5.

This shows significantly positive apprenticeship outcomes in terms of earnings; and are a testament to apprenticeships as a sustainable and effective solution to the skills gap in the United Kingdom and thus to boosting social mobility across the country.

It has been shown that apprentices themselves almost universally agree that entering an apprenticeship has been beneficial. It was found that 85% of apprentices said their ability to do their job had been increased, and 83% said their career prospects had improved. This clearly shows the universal benefit of apprenticeships6.

5 https://www.gov.uk/government/publications/apprenticeship-levyhow-it-will-work/apprenticeship-levy-how-it-will-work 6 Department for Education (2015). ‘Apprenticeships Evaluation 2015 - Learners,’ Government Social Research

By delivering these benefits for individuals, businesses and the economy, it is clear that Severn Trent recognises the importance apprenticeships can have in creating opportunity and wider economic growth through increased productivity, resulting in a more highly skilled workforce.

That is why at Severn Trent, apprenticeships are the focal point of their long-term business strategy. It is an approach built around ensuring they create opportunities and training for their apprentices to be equipped with the right skills and abilities to allow their talents to flourish.

Severn Trent employs and delivers services to people across the entire Midlands, from its headquarters in Coventry.

South Coventry is ranked in the bottom half of Government’s new national Social Mobility Index. Meanwhile, neighbouring areas North West Coventry and North East Coventry are ranked 298th and 403rd respectively out of 650 in total. This demonstrates that as a city, Coventry has great potential to improve social mobility outcomes for young people.

In an area that should be performing much better, Severn Trent is a great example of one business that is pulling more than its weight to benefit young people locally and boosting social mobility.

3. SEVERN TRENT’S APPRENTICESHIP SCHEME Severn Trent’s apprenticeship scheme allows individuals to join the next generation of operational specialists in their engineering, financial, digital, human resources and legal teams.

The schemes are focused on delivering quality training to ensure every individual can fulfil their potential. The company’s apprenticeships are structured to give individuals an opportunity to experience a broad range of tasks across the industry and across different sites within the business. This includes two separate schemes: the water process technician and utilities engineering technician schemes; and higher apprenticeships - including engineering, project management, finance, group commercial, digital, human resources, legal and quantity surveyor schemes.

The technician scheme is a two to three year apprenticeship working across the Severn Trent operational region. During the first year most of the work is largely off-site, completing knowledge

elements of the apprenticeship, which is largely a learning and developmental part of the process.

In the second year Severn Trent’s apprentices join their primary operational site for a year, and alongside this they undertake short placements and training courses as necessary to continue their development.

In the higher apprenticeships scheme, apprentices are based primarily in one of Severn Trent’s office locations, while alongside this, studying at college or at one of Severn Trent’s training providers. While apprentices will be working from day one, they also take part in Severn Trent’s Apprentice Development Programme through short experience placements, internal training and full apprentice induction. This ensures a holistic approach to learning and training to help apprentices develop as much as possible and fulfil their potential in the workplace, all while earning.

Severn Trent understands that alongside the fundamentals of learning and training, support and mentoring is a crucial way to help individuals through their journey and fulfil their potential.

That is why all of their apprentices are equipped with a strong network in place to support each of them through their development on the apprenticeship programmes. This support network includes the Apprentice programme team and Apprentice buddies throughout the business, which both provide regular feedback on the apprentices’ progress and are on-hand to discuss any issues along their journey.

Severn Trent’s apprentices work closely with their line managers and site mentors, and have quarterly performance reviews to discuss progress, review their actions plans and discuss their future development. All apprentices are assigned a colleague from within the business to act as their personal mentors, sharing their experiences and championing them as they progress within Severn Trent.

Alongside on-the-job learning and earning, Severn Trent’s apprenticeship programmes are combined with formal qualifications.

Apprentices at Severn Trent are each equipped with a personal development plan, which is designed with specific relevance for their role and training, in collaboration with their line manager and mentor. It is reviewed regularly to inform the apprentices’ quarterly performance reviews and to support development throughout the apprenticeship scheme.

The apprentices complete core training in the relevant areas required for their respective roles, including Health, Safety & the Environment, First Aid, Continuous Improvement, and Customer Experience. Severn Trent also encourages all individuals participating in its apprenticeship programmes to attend any additional training

courses that are relevant to their role, as well as the range of options among internal training opportunities available across the business.

A good example of where formal qualifications can be gained from Severn Trent’s apprenticeship is the Technician and Engineering schemes. Successful completion of the Technician and Engineering schemes will see those apprentices awarded Engineering Technician status which provides an opportunity to register with the professional institutions and work towards Chartered Status. This can open a wealth of opportunities in the sector in this specialist role thereafter.

CASE STUDY: JAZZ PANESAR Jazz is an apprentice on Severn Trent’s Digital team.

‘I applied for an apprenticeship because I wanted to expand my knowledge.

I prefer tactile learning which is exactly what an apprenticeship allows you to do. One of the best things about an apprenticeship is you can earn and learn simultaneously.

With this apprenticeship, I am able to obtain a degree without university. Therefore, I am experiencing similar opportunities as graduates but also with four years of work experience. I feel apprenticeships are generally a better route for success as you gain more experience as well as gaining a qualification.

When I first started my apprenticeship, I lacked self-confidence and soft skills.

However, I was instantly respected by and accepted by the team which aided my development. For example, when communicating with stakeholders, I would always ask for guidance from my mentor and get them to check it. When my mentor told me he was no longer going to check, I gained confidence by doing this myself which allowed me to build my network across STW.’

CASE STUDY: CLARISSA HORN Clarissa is a highly committed individual who has fully embraced all aspects of working life. Her first placement introduced her to high volume processing and she became one of the “go to� members for query resolution.

Her second placement exposed Clarissa to delivering process improvements and she introduced some simple but innovative ideas to drive efficiencies. She sought cross training and then worked hard to improve a KPI which had been in red status for over a year and thanks to her work has converted to green status for several consecutive months.

Clarissa has passed all subject exams at Level 3 and is now working towards her final paper, while participating in extra-curricular activities alongside her apprenticeship training and learning, including membership of forums to promote colleague engagement and supporting workplace equality.

4. APPRENTICESHIP LEVY The UK Apprenticeship Levy was introduced following reform of the Government’s apprenticeship funding in 2016 to encourage employers to take on more apprentices. The aim of this investment in apprenticeships and training on a long-term sustainable basis, is to ensure that the largest corporations operating in the UK, who can afford it, contribute to training and apprentice schemes.

All UK employers that have an annual pay bill in excess of £3 million are required to contribute towards the levy. This includes both public and private sector employers, alongside charitable organisations and educational providers7.

The levy rate is currently set at 0.5% of an employer’s wage bill. From this each employer will receive an allowance of £15,000 to offset against their levy payment8. This means that the levy will only be paid on any pay bill in excess of £3 million and that fewer than 2% of UK employers will pay it9.

By 2019-20 it is expected that the levy will raise approximately £3 billion across the UK. The benefits of this model mean that it puts control of apprenticeships in the hands of employers and ensures business-led solutions to social mobility across the economy. It encourages employers to invest in their apprentices, and take on more, like Severn Trent has a proud record of doing.

There are examples across developed economies whose governments have introduced tax incentives and levies to encourage employers to take on apprentices, including Denmark and France.

7 https://www.gov.uk/government/publications/apprenticeship-levyhow-it-will-work/apprenticeship-levy-how-it-will-work 8 Ibid 9 Ibid

National Apprenticeships However, since the apprenticeship levy was introduced, the statistics raise questions as to whether it has lived up to the Government’s aims and the expectations of the private and public sectors.

The number of apprenticeships has fallen since the introduction of the new apprenticeship funding system in May 2017. There were 199,100 fewer starts in 2017/18, compared to 2016/17.

Within these figures, starts at intermediate level and apprentices aged 25 and over were particularly affected. In total, 94,000 fewer people were participating in apprenticeships in 2017/18 than in 2016/17.

Since the apprenticeship funding reform in 2016, and the subsequent introduction of the apprenticeship levy, national apprenticeships are now at the lowest point since 2009/10.

However, despite the national downward trend, Severn Trent has continued to introduce a diverse range of apprenticeship programmes.

At Severn Trent, the number of programmes has increased from just 4 in 2017/18 to a total offering of 13 in 2019/20. This shows that under the right leadership companies can make a significant difference in social mobility and boost the prospects of young people aspiring to enter skilled employment. Apprenticeships are a great way to do this; and with the support of Government they can do even more.

5. NEXT STEPS Severn Trent is at the forefront of efforts in ethical corporate responsibility and boosting social mobility. From its focus on creating an ethical supply chain and boosting social mobility and opportunity through its first-class apprenticeships, Severn Trent is a pioneering social mobility champion. However, companies like it can do even more if given the freedom.

It is a reality that business-led solutions are a key method of boosting social mobility across the country. Businesses have the potential to make a transformative effect in raising social mobility and addressing the growing skills gap.

While the number of apprenticeships in the UK has increased over the last decade, currently there are only 15% of workplaces that employ apprentices, so it is clear that there is more work to be done.

It appears the Government’s ambition of three million starts by 2020 remains a target that will be difficult to achieve. However, we want to see the system changed and improved to help boost social mobility.

Utilising the leadership of companies like Severn Trent, increased freedoms would allow large employers, such as those in the water sector, to turn on the skills tap in the UK. There is exciting potential for the key insights from Severn Trent’s innovation and success in improving social mobility to be applied to both the water sector and economy as a whole:

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Regional: The positive impact on social mobility of Severn Trent’s focus on apprenticeships and the company’s corporate leadership as a key regional employer;

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Sector: The potential for utilities companies to work together to share best practice in boosting social mobility to develop further innovative and collective approaches within the sector; and

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Reform: Exploring how the apprenticeship levy can be reformed to give responsible employers, such as Severn Trent, more freedom to spend the levy funds directly on expanding employment.

SEVERN TRENT BUSINESS PLAN 2020-2025

Introducing our plan for our customers

Today, we all expect the companies that serve us to be a positive influence in our lives, and to benefit the society we live in. Being ‘almost good enough’ is, frankly, just not good enough - we’ll only give our custom to the brands we trust.

While none of us have a choice about who provides our water - so we can’t vote with our feet - customers quite rightly have very high expectations of water companies. At Severn Trent, we know we are uniquely privileged. We see the next five years as a critical opportunity to show how we’re running a public service for the public good. And we’re going to build on our long term track record and take service standards to new, ambitious levels.

We’ll do this by: - further reducing the service failures that irritate and inconvenience you; - giving you the respect, attention and personalised service you deserve, particularly

when things go wrong; and - playing a much bigger role in your community.

And we’re going to do all this while lowering bills and providing financial support to customers who still struggle to pay. But is this good enough? We understand the scepticism about ‘big business’ and the role ‘private’ companies have in providing essential services like water. So we want to be a role model for private companies delivering a public service. We’re going to show that we’re a responsible organisation that does things for the right reasons – that makes balanced decisions for the long term and always considers you and your interests. A company that’s more than a ‘silent partner’ in your life, we want to be a company that you’d positively choose to provide your water, if you had the choice.

Our goal is to be the most trusted water company by 2020 and every year thereafter. But trust has to be earned - it is given, not taken, and it has to be given by you, our customers.

What you told us Good listeners make better decisions. So before we started writing a single word of our plan for 2020-25, we started by listening to what you think and want from us. We focused on having good quality conversations, rather than quantity, because we want to keep these conversations going in the future. Even so, more of you than ever before took part in our research - over 32,000 of you - and we looked again at 24,000 complaints we’d received, as well as taking on board criticisms made on social media. In brief, this is what we learnt: You want bills that are no higher than absolutely necessary. Water is essential - and it must be affordable for all. At the same time, you’re concerned that even the lowest bill can be too high for some people. So you want us to find new and better ways to help the 11% of our customers who told us that they might struggle to pay, and to understand that your personal circumstances may change from time to time.

You think that a reliable supply of clean water and an effective wastewater service are absolute nonnegotiables, and you want us to keep improving in these areas. But it’s also clear that we need to focus on other important aspects of service that haven’t been high enough on our radar (because we hadn’t always seen them from your perspective) - such as low pressure.

You don’t want us to cut corners when it comes to looking after and improving water infrastructure – you want to know that your children and grandchildren will also have access to reliable water and wastewater services. And you want us to do everything we can to conserve water.

Like us, you know that we don’t always get everything right. But while this frustrates you, what really upsets you is when we don’t take responsibility for a problem, fail to fix it first time or don’t give you the respect and care you deserve.

You expect us to do more for the towns, cities and villages where we all live and work. You value your local environment and rivers, so you want us to look after them properly. And you support our efforts to improve habitats on our sites, and to create more green spaces for you to enjoy.

You also understand the importance of us being financially sound and not carrying too much debt. A sense of fair play and transparency matters. So while you don’t want us to pay excessive dividends, you agree that really good performance should be rewarded, as long as poor performance is penalised. And when we do perform well, you expect us to share the benefits with everybody, not just with shareholders.

So what are we going to do?

Affordability - Not content with having the

lowest average bills in the country since 2010, we’re now going to go even further to help your household finances by reducing bills by 5% (excluding the impact of inflation) - that’s more than double our 2015-20 plan on a like- for-like basis. So we’ll keep delivering the lowest average bills in England.

Over the next five years our investors will be earning a lower return – so there’ll be a drop in bills straight away in 2020/21. We’re also committing to become more efficient – by around 13%. These efficiencies will help us to keep bills down in the following four years, as we deliver around £6.6bn of investment to maintain and improve services.

And we’ve also thought carefully about when is the right time to deliver these savings – for customers today or for customers in the future?

We asked some of you in research, and 88% supported the balance we’ve struck.

Supporting those in need - We already help

almost 36,000 people per year who are struggling to pay their bills with our social tariff. But we know that even more people need support. We’re going to almost triple the number of customers benefiting from our social tariff, which you helped us design. We’re also introducing more options, like payment breaks, because some of you told us your money worries were temporary, and you just needed some breathing space to get back on track. We’ll be making this much easier for you by proactively contacting you and making

the process easier. In total, we’ll be helping 47% more customers.

Some of you have circumstances that can make you more vulnerable if there’s an issue with our service, or mean that you find it difficult to contact us. You told us you don’t want to be treated differently, just as a valued customer like any other, and given a service that meets your needs. So we not only designed our service with our customers, but also with the help of experts like St John’s Ambulance and Guide Dogs for the Blind. We’ll keep working with them and others to identify those of you who may benefit from a more tailored service – ideally before you even ask.

A service - The last few years have seen us

make some solid improvements in the service we provide. For example, your wastewater services are amongst the best standard and value in our industry. We consistently score in the top two on the Environment Agency’s assessments, and since 2015, customers have experienced 6,000 fewer sewer flooding incidents. But we want to set the bar even higher. So we’re targeting another 8% reduction in all forms of sewer flooding and a 17% reduction in pollutions in the next five years.

In some areas we haven’t performed as well.

We know the frustrations some of you felt with our water service during the extreme freeze and rapid thaw weather conditions in late February and early March 2018. Some customers didn’t receive the service they rightly expect, so we’re reviewing where we invest in our infrastructure, how we make sure any disruption to you is

minimised if something does go wrong, and in the case of very cold weather, how we can better help you to protect your pipes.

We’re targeting real improvements in other areas too, so that we give you a water service that’s one of the best in the industry. We’re committing to a 48% improvement in managing drinking water quality risks, 5% fewer complaints about the appearance of drinking water, and we’re making a new commitment to resolve 95% of low pressure complaints first time (because previous measures we used weren’t quite getting to the root of your issue). And we’ll keep reducing interruptions to your supply, so that we’re in the top 25% of all the water and wastewater companies.

We’re also going to do more of the things that can lift your day a little. Showing that we really do care can make a real difference – you want a service that’s human and receptive, especially if we’ve got something wrong. We’ll do our very best to sort your problem out - compensating you if appropriate - and learn lessons from it.

We’ve already extended our non-emergency contact hours to 24/7, just like our operational contact centre, so you can contact us about anything, at any time.

Investing for the long term - We’re planning ahead so that the generations to come can rely on us. In our last plan, we were given the go ahead to safeguard the next 100 years of water supply to Birmingham with a major infrastructure scheme - and while we don’t have any projects of this magnitude planned over the next five years, we’re going to continue investing in our strategic grid to improve the ability of our water supplies to cope with shocks and strains

- like the extreme weather we experienced in February and March 2018.

We need to safeguard the future of the water environment and make sure that when we draw water from it, we’re not putting it at risk. And we know that we need to prepare for population growth and uncertainty from climate change. To meet these challenges and protect our water for future generations, we’re committing to reduce leakage by 15% - our biggest ever reduction in a five year period. We know that many of you want to help too, so we’re aiming to triple the rate at which we install water meters and do even more to encourage everyone to use water more efficiently.

And where there’s uncertainty about how climate change could impact us, we’ll only share the costs of any investment with you once we know that it’s needed.

So how are we going to deliver?

How (and why) we deliver is just as important as what we’ll deliver. We’ll hold fast to our values of putting you first, acting with integrity, protecting our environment, and creating an awesome company for our people... by supporting our culture and our commitment to diversity and inclusion for all... and by using our skills to build relationships which provide practical benefits to our communities.

For example, we’ve created a culture that encourages all of our people to think of each day as an opportunity to do something better. Many of our best ideas come from our people - helping to improve our service and keep our costs down.

Our most ambitious goals will depend on brilliant ideas. So in the case of leakage, we’re already using satellites and trialling robots to detect leaks in pipes.

Being innovative also means looking at how we can work with others to improve our services.

So we’ve started to trial trading sludge, explore trading water and going out to the market to seek creative proposals to increase the availability of raw water in the East Midlands. And we’re playing our part in the nationwide picture by working with others to look at how an interconnecting pipe could move water from the North West to customers in the South East.

Playing a bigger part in society - We want to show the difference that we can make to the communities we all call ‘home’.

Almost a third of the UK’s social mobility ‘coldspots’ are in our region. While we already focus our apprenticeships and graduate

schemes in these areas, we’re going to change our recruitment practices so that everybody in our region is aware of the fantastic career opportunities we offer. We’re also going to put £10m of our own money into a technical academy that will not only bolster our own engineering skills - it will help to underpin the skills of the Midlands as a whole, and also be a place where other water experts, such as local authorities and smaller water companies, can come together to share expertise.

We’ll do our bit to help make where you live greener. Over the next five years, we’ll improve up to 2,100km of rivers, taking the total since 2015 to 3,600km - more than half of the rivers in your region. Working with other organisations like the Wildlife Trusts, we’re going to encourage local communities to help us improve biodiversity in areas covering the equivalent of 1,500 football pitches. Where we’re working to fix sewer flooding, we’re going to take the opportunity where we can to create new green spaces to enjoy – adding up to £600,000 of new natural capital. And volunteering by our own people will keep playing an important role too. Over the last year, 40% of us have volunteered our time to clean up around 40km of riverbank.

Some of the problems our communities face can’t be solved by us alone, like complicated flooding issues that need different organisations to work together to fix. We’ve great experience of working in partnership and we’re going to keep working with local authorities, the Environment Agency and local communities to tackle these tough issues.

We’re making sure we provide as much support to your children and grandchildren as we do to you. We want to inspire a generation to change their water use, so we’re taking an innovative roadshow into primary school playgrounds across our region. We’ll also promote the benefits of hydration and spark their interest in a career with us in the future. At the same time, we’re helping almost 500 schools in our region to find and tackle issues with lead in their pipework.

of explaining how we’ve reached the decisions that we’ve made, and how we’ve considered your interests.

And throughout all this, we’ll make sure we keep you really informed, because when you do hear a little bit more about what we do, you’re usually positive about it and want to know more. So, we’ll tell you about how your money is spent, how you’re making a contribution to your community, how your service compares to others and how you can get more out of it. One of the first examples of this commitment in action is that this summer, for the first time in over a decade, we’ve used TV adverts to promote how we can all use water wisely.

Sharing the benefits with everybody -

Being a responsible company - Who owns

water companies and how they’re financed has been a hot topic lately. While many of you don’t worry about it, others are uncomfortable with the idea of a private company providing a public service. But what you all have in common is the desire for things to be fair and transparent.

As one of the country’s 100 largest companies listed on the London Stock Exchange, we have a responsibility to identify and implement best practice, and to be a role model for others. For example, we’re helping set the standard for our sector regarding transparency and fairness on a range of topical issues such as executive pay and financing, as well as on the taxes and dividends we pay. And we know the importance

Explaining how our finances work and how we’ve calculated dividends in everyday language can be difficult. So to keep things simple, we’ve established a set of principles, and every year we’ll keep you informed about how we’ve followed them.

When we deliver better performance to you than we promised, we’re rewarded financially. We’re going to carry on sharing those benefits between our customers and our business - just as we have done in the last five years for example we chose to reinvest £220m of our cost savings into areas such as water quality, security, improving the health of our assets, innovating for the future and supporting vulnerable customers.

We’re also going to continue linking the bonuses of everyone in our business directly to the performance we achieve for you. This isn’t a one-sided deal - if we don’t deliver what we’ve promised, we give money back to you.

From 2020/21 onwards, we’re going to do even more to serve our communities by creating a new community dividend. Comprising employee volunteering time, donations to the Severn Trent Trust Fund and 1% of our profits (which could amount to £2.5m a year), this package will help our most vulnerable customers, enhance the environment and make a real difference to communities. We’ll be establishing an advisory board – that will include representatives from customers - to guide where best to spend the money and also obtain match funding from other bodies.

Our plan - responsible, challenging but can be done We believe we’ve created a responsible, challenging but achievable plan that will set the benchmark for how a privately owned company can deliver public good, not just in the water sector but across UK industry in general. But the

last word should be yours. You gave our plan an 85% acceptability rating – we now need to deliver it.

Acknowledgements Justine Greening, Former Secretary of State for Education Liv Garfield, Chief Executive, Severn Trent Neil Morrison, HR Director, Severn Trent Marie Smart, Apprentice Manager, Severn Trent Callum Crozier, Social Mobility Pledge

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