Pdf

We consult and plan for short, medium and long-term horizons

We provide essential water and wastewater services to millions of customers every day, and our work places us at the heart of the communities in the North West of England.

We are reliant on a variety of key resources, and the way that we manage these is influenced by a broad range of external drivers and relationships with a number of stakeholders.

Managing these relationships and consulting with customers and stakeholders forms an integral part of our long-term planning process.

We agree outcomes that we will deliver for customers during each five-year regulatory period and for the long-term, and the work we do delivers a range of long-term benefits and value for many different stakeholder groups. This value creation feeds back into the continuous cycle of what we do.


Our key resources

Natural resources

  • We rely on natural sources of raw water that we collect for treatment, and we return wastewater safely and cleanly to the environment;
  • We maintain large areas of catchment land in a sustainable way; and
  • We process bioresources from wastewater to generate renewable energy, which helps to reduce our carbon footprint, the amount of waste that goes to landfill, and our energy costs.

Assets

  • Our significant capital investment programme grows our business whilst building resilience and maintaining sustainable long-term assets;
  • We manage our assets as one integrated network through our innovative Systems Thinking approach and using our Integrated Control Centre; and
  • We continually innovate to find more efficient ways of building and maintaining our assets.

People

  • We develop, train and motivate our diverse skilled workforce;
  • We have management incentives based on performance and a long-term incentive plan; and
  • We build effective relationships and work with suppliers who share our values.

Financing

  • We maintain a robust capital structure with an appropriate gearing level;
  • We are prudent in our approach to risk management and we have long-term debt locked in at good relative value; and
  • We proactively engage with equity and credit investors, and maintain access to a range of markets.

Our external drivers and relationships


Stakeholders

  • It is the nature of our business, being such a vital part of our customers' lives and managing huge areas of land where people live and visit, that we have an impact on a large variety of stakeholders; and
  • We build relationships and consult with these stakeholders in developing and executing our plans for running our business.

Natural environment

  • The natural environment is constantly changing, and we must adapt and prepare for future impacts such as climate change and population growth, as our business is very long-term by its nature;
  • Our use and return of water to the environment is a continuous cycle, and returning water cleanly and safely, as well as managing our catchment land effectively, allows this cycle to begin again from the best starting point; and
  • We are committed to reducing our environmental impact in order to protect and enhance the natural environment that we live and operate in.

Economic environment

  • We operate in an area of high regional deprivation in the North West, and so helping vulnerable customers is particularly important for us;
  • We are impacted by market rate movements, such as interest rates and inflation, and seek to manage these prudently to reduce risk as far as practicable; and
  • We are one of the largest employers in the North West and make a huge contribution to the North West economy.

Technology and innovation

  • New technologies present opportunities for us to continue improving quality and efficiency in our business;
  • New ideas can come from many sources, which is why we encourage it across our business at all levels, from our annual CEO Challenge and our dedicated innovation team to our new Innovation Lab; and
  • We constantly seek ways to make our services better, faster, cheaper and safer.

Regulatory environment

  • We place great value on our relationships with our economic, environmental and quality regulators, engaging actively and influencing where we are able to; and
  • It is also part of our sustainable approach to our business that we are constantly adapting to prepare for upcoming market reform, and actively engaging in any discussions about potential future reforms.

Political environment

  • As well as our regulators, we engage with North West MPs through regular meetings, an annual drop-in session with our senior directors, and party conferences; and
  • We engage in relation to areas such as our local investment schemes, our economic contribution to the North West, and key policy issues affecting the water industry.

We deliver the outcomes set out in our regulatory contract


We have plans in place that set out what we are working to deliver within this five-year period within each of the price controls areas set by Ofwat, which for this regulatory period are wholesale water, wholesale wastewater and household retail, with non-household retail sitting within our joint venture, Water Plus.

What differentiates us from our peers is our Systems Thinking approach – we operate our entire network as one integrated system rather than as individual assets.

Our strategy, governance and risk management, values and culture also underpin everything that we do.


Our internal drivers

Strategy

Governance and management

Business model cogs

Systems Thinking

Values and culture

We review progress towards the outcomes we have promised to deliver for customers in this regulatory period.

We measure our performance against operational KPIs as well as financial measures.

These outcomes and KPIs fit within the framework of our three strategic themes.


Our outcomes and KPIs

The best service to customers

Outcomes

  • Provide great water;
  • Dispose of wastewater; and
  • Deliver a service customers can rely on.

KPIs

  • Wholesale ODI composite;
  • SIM – qualitative; and
  • SIM – quantitative.

At the lowest sustainable cost

Outcomes

  • Value for money; and
  • Improved efficiency.

KPIs

  • Totex outperformance;
  • Financing outperformance; and
  • Household retail cost to serve.

In a responsible manner

Outcomes

  • Protect and enhance the environment;
  • Support local communities; and
  • Support employees in a safe workplace.

KPIs

  • Leakage;
  • EA performance assessment; and
  • Dow Jones Sustainability Index.

Our vision is to be the best UK water and wastewater company

We create value for a range of stakeholders

The work we do delivers a wide range of benefits to a variety of stakeholder groups, creating long-term sustainable value for our shareholders, customers, people, the environment, and communities in our region. Responsible business runs through everything we do, as encapsulated by our business principles. Read more at unitedutilities.com/corporate/responsibility/our-approach

For our shareholders

  • We manage risk prudently and provide an appropriate return, investing in our assets for growth and sustainability, and providing income through dividends; and
  • As many of our shareholders are pension funds and charities, the income that we provide is relied on by millions of people every year.

For our customers

  • We focus on innovation and efficiency to provide a great service and bills have declined in real terms since 2010; and
  • We support over 100,000 vulnerable customers through a wide range of assistance schemes, including our sector-leading Priority Services scheme, in our region that struggles with high levels of extreme deprivation.

For our people

  • We focus on attracting, developing and retaining a diverse workforce, and ensuring that we look after their health, safety and wellbeing; and
  • We have more than 5,000 employees, and 10,000 people are engaged through our supply chain, meaning that we support, directly or indirectly, one in every 150 jobs in the region.

For the environment

  • We are rated Industry Leading by the Environment Agency, and we strive to reduce our environmental impact and invest in innovative technology to tackle environmental challenges for future generations; and
  • Maintaining and enhancing our reservoirs, catchment land and bathing waters provides a home for wildlife, areas for recreation, and a major pull for tourism.

For the community

  • We invest in the North West's infrastructure and generate jobs, skills and income through our supply chain that supports the economy in our region;
  • We build partnerships to develop employability skills and help people back to work. We also work with teachers and children to build awareness among the next generation; and
  • We actively encourage employee volunteering programmes to help create better places, stronger communities, and accomplish more to address local issues together.

We review and measure our progress