WATERSHARE PANEL

Terms of Reference

The Terms of Reference sets out the overall purpose and responsibilities of the WaterShare Panel.

Background

Transparency and openness about delivery performance are fundamental requirements for all providers of essential public services, including those in the water industry. Well established processes are already in place for this and are important to customers, investors and stakeholders.

WaterShare is South West Water’s performance sharing and reporting framework that represents an evolutionary step to greater transparency and openness. Developed in conjunction with South West Water’s customers and stakeholders, it is a transparent approach for sharing of excellent performance and potential gains in a timely manner with customers. It also allows risks to be articulated when they manifest themselves and describes how the company intends to manage them. This will include, for example, when new obligations (legislative requirements) result in additional costs for customers using the mechanism to ensure that opportunities such as outperformance elsewhere is used to absorb them in the short term. The WaterShare mechanism is a net gain share mechanism for customers.

The WaterShare framework will include a calculation of benefits and costs and apportionment between customer and shareholder of:

  • outperformance of cost base efficiency
  • performance against outcome commitments
  • other areas of risk and opportunity,

as set out in the ‘WaterShare Guide’.

Overall Purpose of the WaterShare Panel

The overall purpose of the WaterShare Panel is to protect the interest of customers by providing independent review of the operation of the performance sharing mechanism ‘WaterShare’ to ensure that its application and scope is consistent with the approach set out in South West Water’s ‘WaterShare Guide’. The Panel will review the company’s approach to sharing customer benefit and the timing of sharing any net gain.

What will the panel do?

The monitoring and reporting of performance against outcomes and associated sharing of reward or application of penalty under the incentive process will be presented to the Panel through the WaterShare framework.

Reporting will be summarised in a scorecard. An annual performance report will contain assured information on each measure of success, cost efficiency performance and delivery against outcomes.
Plans for sharing of any net benefits with customers will be approved by the SWW Board and presented to the WaterShare panel.

The panel will review and challenge areas within the scope of the ‘WaterShare Guide’, including:

  • performance delivery
  • financial impact calculations
  • approach to and scale of customer benefit
  • timing of the sharing of new obligations with customers

The panel will advise the Board of the company on the conclusions from their review. The panel will assure the process using appropriate resources as agreed with the company.

What will the main outputs of the Panel be?

In addition to reviewing and providing challenge to the WaterShare performance, the panel will provide a written conclusion of their review.

Membership

Appointment to the panel will be made by South West Water in consultation with the Independent Chair. No substitutes or seconds will be admitted unless by prior agreement by the company and the Chair.

The Chair will be appointed first through a transparent process and will be a recognised figure in the South West with a proven track record in championing customer issues.

A Vice Chair will be appointed to support the Chair and as a full member of the panel. The panel will encompass:

  • Water Industry Regulators
  • Business Representatives
  • Community Representatives

Additionally it may be beneficial to include Local Authority and shareholder representation.

Membership will be reviewed on an annual basis at the discretion of the company and the Chair.

Governance

The panel have a series of meetings to complete an annual review of WaterShare performance and understand the implications for customers and shareholders.

The timing of meetings will be based around the half yearly and annual reporting periods. Documentation including assurance reports will be provided ahead of meetings.

Agendas will be agreed in partnership with the Chair and minutes of meetings may be posted on our website after they have been verified and signed by the Chair. Commercial confidential information will not be included.

The Chair will receive remuneration and South West Water will make available a standard daily allowance per meeting for out of pocket expenses to be called upon when required and when appropriate.

Members will be asked to sign a confidentiality agreement in relation to commercially sensitive data.

The Terms of Reference of the panel may be amended from time to time by the South West Water Board and will be reviewed by the South West Water Board on an annual basis.

Membership

  • Nick Buckland (Chair)
  • Tim Jones (Deputy Chair)
  • Barbara Shaw
  • Steve Meakin
  • Richard Lacey
  • Deborah Waddell
  • Orlando Venn
  • David Heath
  • Jeremy Bailey
  • Stephen Bird (SWW)
  • Iain Vosper (SWW)
  • Sally Mills (SWW)
  • Mark Hillson (SWW)
  • Jennifer Cooke (SWW)