Over the past four years, our Utilities manager Richard Archer has developed a real passion for the water sector. So much so, that earlier this year he joined the Future Water Association (FWA)- a business support organisation that strives to shape the future of the water sector through innovation and education. We caught up with Richard to gain his insight into the future of the water sector and to learn more about his involvement with the FWA.
Hi Richard, tell us what sparked your initial interest in the water sector?
Prior to joining Deltra, I focused on partnering Media organisations looking to secure Accounting talent. Moving into delivering project, programme and change capability into the Water sector was somewhat of an unknown quantity. However, the driving factor about wanting to work with the Water sector was to understand how the mechanics of an industry and utility provision we generally take for granted operates to provide us clean water and waste services 24/7, 365 days a year.
When did you become involved in the Future Water Association and what encouraged you to join?
Firstly, to explain the role of The Future Water Associate which operates as a membership organisation, it looks to influence the advancement, innovation, engagement, and transformation of the Water Sector. I joined the Future Water Association earlier this year off the back of a conversation with Paul Horton, the CEO of FWA and one of the key themes from the session is the precarious nature of the skills shortages within the Water sector which could hinder its future development.
The rationale behind joining was twofold, firstly due to working with the Water Sector over the last 4 years I recognised there are quite a lot of instances where there is a lack of awareness as to the great work that water organisations deliver. Secondly, it operates as a great platform to engage with other areas of the Water supply chain to collaborate and promote innovation within the Water sector.
What are the advantages of being a part of such an important organisation?
The advantages for being part of the Water sector are many. Firstly, from a personal standpoint I feel that through the engagement sessions I attend I do get upskilled to understand the technicalities of how Water organisations work. From this standpoint, it gives me a competitive advantage in terms of my credibility when I am engaging with future talent and organisations I work with within the Water sector.
Secondly, I feel that as a business, Deltra are making a commitment to the Water sector and driving innovation and we act as a “voice” when it comes to the people challenges geared around working in the water sector. Historically, these associations are dominated by technical and engineering focussed content where I operate as the voice of the people, change and transformation piece.
Also, due to the credibility of the organisation you have direct access to the Water sector and stakeholders who drive decisions. Since being part of the association I have been involved in meetings with a number of the large water organisations and their key decision makers and directly had dialogue with them about their challenges.
You recently attended your first Future Water Association forum. What did you take away from it and will you attend another one in future?
My first session with the FWA was an interesting one, and naturally with these things you are slightly unclear as to what to expect. However, it was a really enjoyable session from a networking standpoint I was introduced to areas of the supply chain I would not normally have visibility over. I was also privy to the FWA’s Water Dragons session which is an opportunity for organisations in the sector to pitch innovative products/services to a panel of water experts with a view of getting investment or moreover supplying services into those Water organisations. I also got visibility as to what are the challenges of the Water sector and the things they will be focussing on as they prepare to gain funding from OFWAT in terms of the next round of investment which runs every five years.
What do you think are the main challenges faced by the water sector and how do you think they can be overcome?
The Water sector being a regulated sector, an operator of essential services and under government scrutiny means they are always facing critical challenges. The Water sector as mentioned is governed by OFWAT which ensures that Water companies are held to account in terms of how they spend money to drive improvements, as well as how they operate and maintain the infrastructure of our waste and water networks.
So, Water companies always have to be mindful as to their commitment to both the regulator as well as to the public and organisations it provides waste and water provisions too. Every 5 years Water companies have to prepare business plans to be submitted to OFWAT as to what their commitments to some of the aforementioned objectives will be, they also have to ensure that what they charge customers for their service provision is in line with OFWAT’s objectives. These timescales are called AMP (Asset Management Plan) or Price Reviews. The next Price Review is PR19, so you will find this term being mentioned as all water companies are having to prepare their draft business plans by May of next year.
The water sector has always operated with engineering and infrastructure at the heart of everything it does, with the advent of competition within the Non-Household Market. More focus is now on delivering a better customer proposition and innovating by using technology to drive better resilience across its infrastructure and waste/water networks. There is also a very real challenge geared around the people element and the fact that across the board there is significant risk geared around talent and a significant ageing workforce. The other big challenge is driving culture and behavioural change across the sector.
Customer expectations are changing and water organisations historically having operated as monopolies holding a view that customers are somewhat secondary to managing infrastructure and the engineering elements of operating a water organisation, for the sector to evolve this mentality will have to change.
What do you think is in store for the future of the water sector?
With competition opening up in the sector this year what I am finding is that there is a lot more consolidation and merger activity happening with new Water Retailers forming across the UK, for example you now have Water Plus which is a JV between United Utilities and Severn Trent and you have Wave which is a JV between Northumbrian Water and Anglian Water. This could well be a sign of the times, where you have will have a Big 4 or 6 similar to the Energy Sector.
The real challenge also is that there may well be the advent of the multi-utility provider where you will have organisations which will deliver water, telephone, gas and electricity. For example, Virgin could provide you a one-stop shop to deliver all utilities into your home and be that ubiquitous supplier. This type of activity could be an opportunity as well as a threat to the sector. So, driving better innovation, operational and asset resilience, using technology to drive better asset management decisions and more activities to digitalise the customer proposition and journey will be all things on the to-do list of senior leaders within the sector.
The other challenges will be if there will be the advent of competition in the domestic market comparable to the one in the energy sector, where consumers are able to easily switch provider if they are seeking a better deal. There is still lots of discussion amongst the incumbents, OFWAT the government if this will deliver real benefit financially to the customer. One thing that is clear is that the sector will undergo significant change and transformation as it has to respond to the changing demands of the regulator and the customer.