Associate feature: Making waves
Public sector makes multi-million pound savings on water services
Few people in Scotland wonder where their water comes from. It falls from the sky in abundance, and flows from the tap on demand.
Not many households will think about how they pay for their water, either. Domestic water charges are usually tucked away in the small print of council tax bills, which taxpayers have little choice about paying and therefore little incentive to query.
Scottish businesses and the public sector do things a little differently.
The water comes from the same place – the abundant publicly owned reservoirs and treatment plants throughout the country – but they have options when it comes to billing, demand management, repairs and maintenance.
In 2015 Anglian Water Business (AWB) secured the contract to provide water retail services to the public sector in Scotland. This includes local authorities, schools, universities, the NHS, prisons and some third sector organisations such as charitable institutions.
In addition to this, the company boasts a growing market share north of the border, with around 23 per cent of the market, and a diverse range of business customers. These include Belhaven pubs, Malmaison, Hotel Du Vin, PureGym, Holland & Barrett, Knight Frank, Trump Turnberry and Asda, which has around 100 sites in Scotland.
AWB merged with Northumbrian Water Group Business (NWG Business) in September 2017 to form a new company called Wave.
Lee Shipsey, Deputy CEO of Wave, said: “Following the mobilisation period, AWB commenced the public sector contract in March 2016, enabling us to deliver savings of £5 million per year to this sector, from a base retail charge perspective alone.
“In addition to that, we are working with the public bodies to help drive consumption efficiencies and wholesaler charge reductions. To date the further annual savings delivered total around £1.7 million per annum.
“In water reduction terms, this is a saving of 650,000 cubic metres of water per year, the same amount of water that flows over Niagara Falls in five minutes.”
Enough water to fill around 260 Olympic size swimming pools, in fact, and this saving was partly through the efficiency practices that the company has imported from its roots in the east of England.
“Ultimately, our tender was deemed to deliver the best overall value to the Scottish taxpayers.
“Scottish Procurement followed a very thorough, prescribed process when evaluating tenders. Not only did we provide the best overall value solution from an immediate savings perspective, we also demonstrated our ability to drive water efficiency and hence further savings for the Scottish public sector.
“We won the contract the second time we tendered for it, having learned from experience and taking on board the feedback we received when it first came to market in 2011.
“By the time we re-tendered in 2014, our retail business had further developed and grown in Scotland and that enabled us to demonstrate how well we could serve Scottish public bodies.”
Since then, the SNP government has also demonstrated an increased zeal for publicly owned services, with proposals to set up public sector rail and energy companies in the years ahead.
Wave, which will replace the soon-to-be phased out AWB brand by the time the public sector water contract is re-tendered, is confident that it will not be swept away in the rising tide of public sector procurement.
“One of the benefits of putting the two companies together is achieving economies of scale, but also in bringing together our collective expertise,” said Shipsey.
“There is a good synergy, and the more competitive we are, ultimately the better it is for all Scottish businesses and organisations, whether private or public sector.
“Historically, the East Anglian area has been very dry in the summer months, so AWB has a long history of driving water efficiency, tackling leakage and making less water go a long way.
“That has been passed on to how we work with our public sector and business customers.”
Scotland, of course, does not have that problem but there are still a lot of benefits from being efficient with water usage, not least for the environment and in reducing business overheads.
“There’s no need to waste it,” said Shipsey.
“Also, there is a quite lot of energy consumed in the treatment and distribution of water, so using less water results in a corresponding drop in energy consumption overall, and that helps to reduce carbon emissions. And for metered business customers, the less water they use, the less they pay for.
“As a water retail company, we read the meters, produce business customer bills, provide account management services and help private and public sector customers achieve efficiencies through our range of value adding services.
“Approximately 90 per cent of water charges that customers pay ultimately go to the wholesaler. There is currently no competition in this part of the market. Wave can help customers to reduce these charges though, often significantly, through helping them with demand management and water efficiency.
“We aim to maximise our competitiveness by putting together two companies that are very like-minded in their approach to the market,” said Shipsey.
“We strive to be a high quality, competitive, fair-priced company – we’re all about delivering the best overall value and efficiency to customers.”
“The two companies have strong brand identities respected by many loyal customers, so we have to be careful in how we move to the new Wave brand – we don’t want to throw the baby out with the bathwater. It’s important that we take customers with us and they understand our origins and our historical expertise.
“In November 2017 we launched what we call our ‘tri-brand’, which features the new Wave logo as the predominant identity along with AWB and NWGB logos to help ensure our heritage is communicated.
“Later this year we will move to sole use of the Wave logo, when customers are more familiar with the new brand identity.”
The company employs 16 people directly in Scotland, with two apprentices in its new connections business and customer support team.
As a signatory to the Scottish Business Pledge it pays at least the living wage, and in most cases considerably higher. It also supports a network of contractors from the Borders to the Outer Hebrides, providing services such as leakage detection and meter reading.
It recently participated in a STEM (science, technology, engineering and maths) challenge in schools, run by the Scottish Council for Development and Industry, to train the next generation of engineers that Scotland desperately needs, and participates in volunteering events such as a clean-up of Scotland’s canals.
Anglian Water Business / Wave is now almost two years into its ‘three plus one’ year contract.
It aims to have firmly established a good record of delivery to the public sector to stand it in good stead when it comes up for re-tender.
It is confident it can win over even its most ideological of detractors.
Shipsey said: “We will put our best foot forward. We will be able to demonstrate that we have delivered on the commitments we made.
“We’re still looking to achieve further savings for the Scottish public sector. In any large portfolio of premises, you will have leakage and other issues that cause excessive consumption and are likely to have gone undetected. We are good at finding that inefficiency and helping the public sector to address it.
“When we come to the end of our contract term we expect be able to proudly stand by our results and say, ‘this is what we have done so far and given the chance there is more we can do in the future.’
“We are gearing up our organisation to be as competitive as it can be by forming this joint venture, and hope to be well-positioned to retain the contract when it comes to market again.
“It certainly won’t be for the want of trying to deliver the best possible service to Scotland’s public sector.”
Associate feature sponsored by Wave
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