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2010 and beyond: OPA workshop 21 November 2007 Richard Ackroyd, Director of Regulation & Investment, Yorkshire Water Services Ltd.

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Presentation on theme: "2010 and beyond: OPA workshop 21 November 2007 Richard Ackroyd, Director of Regulation & Investment, Yorkshire Water Services Ltd."— Presentation transcript:

1 2010 and beyond: OPA workshop 21 November 2007 Richard Ackroyd, Director of Regulation & Investment, Yorkshire Water Services Ltd

2 Since 2000 the industry has delivered: Improved performance Increased levels of service Increased efficiency Total Score (WASCs) Anglian Yorkshire Wessex Welsh South West United Utilities Northumbrian Severn Trent Thames Southern Average The OPA legacy

3 Customers? Is it relevant for today’s customer? Has customer thinking evolved? Have customer expectations increased? Questions for today Companies? How important is it to companies? Can it drive further improvements to service? Can it incentivise a step-change in service? What does the OPA mean for…

4 Reputation: the primary incentive the industry league table but viewed as important by some, but not all The current incentive mechanism Financial: benefit if high performing (+ 0.5% on k) cost if poor performing (- 1% on k) Can these incentives drive our industry forward?

5 The competitive market place: Innovation  New products  Broader service offerings  Step-change service improvements Learning from other sectors

6 The competitive market place Entertainment Banking Retail Travel Insurance Communication

7 Water industry innovation Zero inconvenience New communication channels On-line real time information Proactive, added-value services Smart metering Flexible tariff solutions What might customers want from their water companies in the future?

8 The need for greater incentives the cost-savings alone may not provide a sufficiently large incentive for a company to invest in a real step- change to its service offering the improvement may require a substantial investment in new systems and technologies, where the pay-back would be much longer than 5 years Improving customer service reduces cost, but…

9 The need for greater incentives may restrict the pace of innovation and technical development and may allow the industry to fall behind other service industry sectors An OPA with insufficient incentives … … resulting in a poorer perception of the water industry in respect of service and value-for-money

10 A mechanism for innovation innovative thinking and development continuous service improvement and step-change service improvements An OPA which rewards …. … will lead to an enhanced perception of the water industry in respect of service and value-for-money

11 In summary Measures focusing on customer interfaces and reflecting customers’ views A service-focused league table An OPA which incentivises significant investment in service improvement …. a customer-centric OPA driving step-change improvements to service What does our industry need and want?

12 2010 and beyond: OPA workshop 21 November 2007 Richard Ackroyd, Director of Regulation & Investment, Yorkshire Water Services Ltd


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