Last year, there was plenty of discussion surrounding the challenges that PR19 was likely to bring to water companies in England and Wales. Now, the waiting is over, and regulator Ofwat has delivered its verdict on the plans submitted back in September. The majority of suppliers have received scathing reviews and been told that they need to do more, but one shining light that has been held up as an example to others is South West Water (SWW).
Setting a new standard
SWW made use of Turquoise Thinking and several other agencies to deliver the research and customer insights that were instrumental in formulating its PR19 business plan, and this proved to be a strategy that paid dividends.
Ofwat commended SWW’s plan, going so far as to say that these “set a new standard” for the water sector.
This is highly gratifying for everyone who contributed towards the success of the PR19 plan, and will undoubtedly give other water companies across the country pause for thought.
Severn Trent and United Utilities were also singled out for praise, and can join SWW in implementing their PR19 plans without further ado in what Ofwat is calling its “fast track” category. However, the news for the other 14 water companies was less positive, and Ofwat says they need to revise their plans, following the model of the benchmark suppliers.
Understanding the market
Every one of the water companies conducted market research in formulating its plan, but what did South West Water get so right compared with the other suppliers? Part of the answer lies with its long business relationship with its market researchers. Turquoise has 30 years’ experience in utilities market research and has been working alongside South West Water since the 1980s. Few, if any, market research firms have that level of knowledge and experience, and the ability to ask the right questions in the right way is what ultimately makes the difference.
Turquoise dug into the qualitative side of the research by using a variety of tools. These included in-depth interviews, focus groups and co-creation groups. Other specific measures included the following:
- Future customer research
- Regional investment research
- Retailer research
- Priority Services Register research
- Priorities and measures research
- OPM scoping research
PR19 was always going to be a tough challenge for the water companies. As Rachel Fletcher, the Ofwat Chief Executive, put it, the regulator has essentially demanded that water companies “deliver more for less” over the next five years. In any industry, that is going to be a big ask, and to come up with a plan that will deliver demands full colour market insights.
Fletcher praised South West Water along with the other fast tracked suppliers for delivering plans that will improve efficiency, ensure they meet their statutory obligations and deliver “more of what matters” to the communities that they serve over the coming five years. She said that the gauntlet has now been thrown down to the other water companies in England and Wales to meet this same high standard.