Current issues

Big issues

Our business is affected by a wide range of external factors – environmental, regulatory, economic and societal. This section looks at the big issues we have faced across 2015/16:

Water quality

In August 2015, traces of the parasite cryptosporidium affected drinking water quality at Franklaw water treatment works, impacting over 300,000 homes in Lancashire.

As a precautionary measure we issued a ‘boil water advice’ for one month, which inconvenienced our customers. We provided bottled water for those who were unable to boil their water safely and, once the advice was lifted, we made compensation payments quickly.

Throughout the incident, we kept affected customers fully informed and maintained regular engagement with key bodies such as Public Health England and local authorities, seeking their advice, input and agreement to our proposed course of action.

Extreme weather

Responsible water suppliers must be prepared for extreme weather events. We invest in our assets so that they continue to provide services to customers should an extreme event occur and, if services are interrupted, we rely on our robust contingency plans to restore normal operation as soon as possible.

The 2015 winter storms were especially severe in the North West causing unprecedented flooding in Cumbria, Lancashire and Greater Manchester. Work continues to repair the flood damage and improve asset protection should similar events reoccur. Our focus is on better understanding the phenomenon and developing solutions to mitigate the risk from extreme events.

Debt and affordability

The North West continues to have the highest proportion of economically deprived households in England, and a sizeable number of our customers have a hard time paying their bills.

We offer a wide range of financial support and invest £5m per year into our charitable trust to help those struggling the most. As a result, we contain levels of bad debt and decrease the cost burden on our wider customer base.

In addition, our recently launched Priority Services provide extra support for customers with financial worries or language barriers, or with other needs due to age, illness, disability or mental health.

Regulatory reform

The 2014 Water Act represents the most significant change to the water sector since privatisation, enabling competition for business customers in 2017, and a transition in following years to competition in some aspects of wholesale service delivery such as wastewater treatment.

We are fully engaged with regards to market reform, being always mindful of the potential impact on our customers and our other shareholders, with our Board CR Committee considering what developments such as market reform means for our CR strategy.

Shale gas

Gas extraction from shale rock, using the process called fracking, continues to generate considerable debate. The North West potentially holds vast quantities of shale gas, and we have been investigating what extraction might mean for water quality and water resources in our region.

Our view on shale gas extraction remains unchanged – public health is our top priority and we expect that Government support for fracking will result in a robust regulatory regime that will ensure public water supplies are protected.

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