Together shaping the future of your water and wastewater services. What do you care about? unitedutilities.com #nwmatters

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1 Together shaping the future of your water and wastewater services What do you care about? unitedutilities.com #nwmatters

2 United Utilities Business Plan Priorities and Targets for Ensuring we know what you care about most You might not think we impact on your life, but we do in many ways. From the water that comes out of your tap to the quality of the bathing waters around our coastline and much more besides. That s why caring for your water means caring about lots of other things too. We re committed to improving the service you receive while at the same time protecting the environment and helping customers in need of extra support. This document summarises some of the different options available when it comes to improving water and wastewater services across the North West of England between 2020 and In recent years, we ve contacted thousands of residential and business customers directly to find out which areas of our service matter most to them. In addition, whenever customers contact us we analyse the reasons why to understand what we can learn. In this document, we've set out what we know about eight of the key service areas that we've identified so far. As a United Utilities customer, we want to know if these priorities and the targets we re proposing are right for you and the region we serve. This is your chance to influence our next business plan which runs from 2020 to 2025 and will have a direct impact on the services you receive and how much you pay during that period. Central to this consultation is the need to balance affordable bills with the investment necessary to meet your expectations and those of businesses and other stakeholders. We re determined to strike the right balance between different priorities. So please, have a read and let us know what you care about most. We genuinely appreciate your involvement. We re committed to improving the service you receive while at the same time protecting the environment and helping customers in need of extra support. Visit us online: unitedutilities.com/nwmatters

3 The North West matters. 01

4 Let us know what you truly care about... Have we got the right balance? We re committed to doing the right thing for everyone living in the North West, this region s economy and our natural environment. Proposed areas for service improvement between 2020 and 2025 We need to ensure that our services are sufficiently resilient to face future challenges, like increasingly frequent storms which have the potential to disrupt your water supply. From the conversations we ve had with you so far, we know that the price you pay for your services is your highest priority and this is something we ve considered carefully. Your service Improving the North West's environment Extra help for those in need We also know you support making improvements to the services you receive. Feedback Please let us know what you care most about... Use #nwmatters Don t forget Facebook: facebook.com/officialunitedutilities Go to our dedicated web page here: unitedutilities.com/nwmatters Improving the quality of the water that comes through your taps. Reducing interruptions to your day-to-day water supply. Reducing the flooding from sewers that affects people s lives Reducing pollution incidents. Reducing the amount of water that leaks from our pipes. Improving the quality of rivers. 7 8 Increasing help for customers who are struggling to pay their water bill. More initiatives to help customers who are potentially vulnerable and need extra help. us directly on nwmatters@uuplc.co.uk Write to us at this address: North West Matters Consultation, United Utilities Group PLC, Haweswater House, Lingley Mere Business Park, Lingley Green Avenue, Great Sankey, Warrington, WA5 3LP. There are decisions to be made about how much progress you want us to make in improving these areas between 2020 and 2025 and beyond. We want your views on: Whether these are the right areas to target improvements; The extent to which you want us to improve in these areas; How we can work together to deliver improvements more efficiently; and Whether there s anything else you want us to prioritise. 02

5 I care about reducing the risk of flooding Richard Lucas, Farmer

6 The North West matters The improvements you want us to deliver will sometimes have an impact on what you pay. When it comes to setting your bills, there are three important elements: 1. How much it costs to operate our existing services; 2. The cost of delivering service and environmental improvements; and With proposed improvements 3. The cost of borrowing the money to make those investments. In recent years, the cost of financing investment has reduced. In addition we expect to be more efficient in running our operations in the future. This means that before inflation which is the measure of how the costs of other products and services are rising is added to it, the average annual bill in 2025 will be lower than today's bill. This is true regardless of whether or not you support the service and environmental improvements we re proposing, which are based on what customers are telling us. But once inflation is added and let s assume that this will be 2% each year between 2020 and 2025 the average bill could rise Bill 450 Efficiency & financing savings - 63 Potential impact of Manchester & Pennine Resilience Scheme + 15 Other proposed service improvements + 17 Bill before inflation 419 Inflation +2% per year Bill 463 If you agree with the improvement proposals set out in this document, then the average bill in 2025 might rise to 463, including the effect of inflation. That is 13 more than we expect the average bill will be in If you think services should improve more slowly or quickly, then the cost of the average bill in 2025 would either fall or rise accordingly. The following diagram shows the benefit from future financing and efficiency savings on the average bill in 2025 as well as the effect of including the proposed service improvements in this document, or not including them. Without proposed improvements In addition to the priorities contained in this document we will also be consulting with customers and stakeholders on a project that will help safeguard Greater Manchester's water supply, called "Manchester and Pennine Resilience" (more information about this scheme is on page 6). This could add up to 15 a year to the average bill. We ve included this amount here to show how an average annual bill could change if that work goes ahead. Let us know what you care about most so we can devise a plan that truly takes your views into account. For business customers, the choices that you make about these priorities will influence the level of the wholesale charge, which is the main driver of an average bill Bill 450 Efficiency & financing savings - 63 Potential impact of Manchester & Pennine Resilience Scheme + 15 Without proposed service improvements 0 Bill before inflation 402 Inflation +2% per year Bill

7 A plan for the North West We ve developed these priorities based on the conversations we ve had with customers. We want a plan that reflects your priorities and makes a meaningful improvement to the services we provide across the region. That s why it s so important you tell us what you care most about... Areas of real economic hardship The North West currently has ten of the 20 most deprived neighbourhoods in England, according to the Government s indices of deprivation. Out of the seven million people who live here, around 800,000 residents are on benefits and 91,000 are on universal credit representing 30% of all British recipients. Some families are struggling to make ends meet and, in some cases, more than 3% of their household income goes on water bills which is classed as being in water poverty. Carlisle Workington Whitehaven Kendal Barrow-in Furness Lancaster Blackpool Preston Burnley 06 The North West Beauty in diversity United Utilities serves rural areas of outstanding natural beauty, dynamic towns and cities as well as a long coastline which is an important tourist and leisure attraction. Both the Lake District and parts of Liverpool s city centre and waterfront have been awarded World Heritage Status by UNESCO, placing them on a par with Stonehenge and the Taj Mahal. Integral to the Northern Powerhouse The North West sits at the heart of the Northern Powerhouse programme. This is intended to boost economic growth and generate jobs in the North of England through the Government transferring some power to local or regional administration (devolution) and greatly improved transport links, among other things. In short, the quality of life for many is high and shows every sign of improving. But we also recognise that not everyone is so fortunate. A particularly wet region Manchester has long been nicknamed Britain s rainy city. Official figures show us to be one of the wettest parts of England. The Met Office reports that the higher parts of the Lake District are particularly wet with an average of more than 3,200mm of rain per year. By contrast, the average annual rainfall for Britain is 1,154mm. A heritage to be proud of After cradling the Industrial Revolution more than 200 years ago, our region has long been synonymous with manufacturing. A proud agricultural heritage which spans from the Cheshire Plains to Lake District hill farms is also integral to the North West s economy and both of these sectors have historically had a direct impact on the availability of water and its quality. Blackburn Bolton Liverpool Warrington Chester Crewe Manchester Stockport These are just a few of the issues we d like you to consider when answering the consultation questions on our key priorities. The choices you help us make will drive the service improvements you receive and the future level of bills. We will be carrying out separate consultation on our proposals for a project called Manchester and Pennine Resilience. This is because the potential risk to future water supplies in the region is a complicated matter and we are drawing up several options on how we might deal with this issue, which includes one of the region s most important water pipelines, the Haweswater Aqueduct. For more than 60 years, the aqueduct has been delivering up to 570 million litres of fresh drinking water from Cumbria to Manchester and the Cumbrian and Pennine areas every day the equivalent of one Olympic-sized swimming pool every six seconds. Hundreds of feet deep in places and 90km long, the aqueduct transports approximately 35% of the North West s water and we want to ensure that residents and businesses continue to have access to vital clean, fresh and reliable water supplies in the future. The proposed options will be the subject of very detailed consultation with our customers and stakeholders.

8 I care about helping people who struggle with their bills Amy Doumbia, Salford resident

9 The options Your service How important do you consider: 1. Improving the quality of the water that comes through your taps? Working on your behalf You expect us to provide you with clean, clear drinking water that s free from unwanted taste, smell and colour and we re constantly working to ensure this happens. The challenges we face Ensuring you have clean and clear water is at the heart of our daily operations. Samples taken from taps across the region in 2016 showed that our water quality compliance rate is 99.96%. Performance in this area is assessed by testing samples from customers taps against 39 water quality standards. This means our drinking water complies with strict national guidelines for safety and purity. Nonetheless, there s always work to be done when it comes to maintaining and upgrading the infrastructure we use to collect, store, screen, treat and subsequently transport the water to your taps. What you ve told us so far We know you care about high quality water it s one of your top priorities. Around 5% of all contacts from customers which includes letters, s and activity on social media were about the quality of our drinking water, including its taste, smell and colour in the year to April While recognising that this is a relatively small percentage, it s still something that we want to decrease in the long run particularly problems relating to the taste and smell of water. However, most of you are also satisfied with the current quality of your water and our previous research shows that you don t want us to prioritise it over other areas of service improvement. What we ve achieved so far We measure our performance against the standards for water quality set by the Drinking Water Inspectorate. We routinely achieve a pass rate of almost 100%. In terms of performance compared with other companies on drinking water quality standards, we are ranked average. Our objectives and plans We re proposing to target a small reduction in the number of customer contacts about drinking water taste and odour between 2020 and The reason for this is simple our water is already of a very high quality so making further rapid improvements could be costly. In addition, we know from our research that your priorities for improvement rest elsewhere. Your options We currently receive 2,750 customer contacts each year specifically about the taste and smell of our water. We re proposing to reduce this figure by 10% to 2,475 which will add around 30p to the average bill. Alternatively, we could aim to reduce the number of contacts we receive by 20% to 2,200 which would add approximately 50p to the average bill. If we reduced the figure by nearly one-third to 1,950, it will cost around 70p more each year. Should we aim to reduce the number of customer contacts by around 10%? Should we target a reduction of around 20%? Or should we aim to cut the number of contacts by around one-third? Reducing taste and odour complaints Current Level Proposed target +30p Option 1 +50p Option 2 +70p 2,900 2,700 2,500 2,300 2,100 1,900 1,700 1,500 Number of complaints 08

10 The options - Assisting your service customers in need How important do you consider: 2. Reducing interruptions to your day-to-day water supply? Working on your behalf Turn on a tap in the North West and you can do so knowing we work around the clock to ensure there s a constant supply of water. The challenges we face We work hard to ensure that a constant water supply is what you receive but we know we don't always get it right. Sometimes pipes burst and we re unable to fix them quickly enough to keep water flowing to your home or business. Whenever this happens, we learn from it in order to help prevent that situation from happening again. We measure performance in terms of average minutes without flowing water for each customer. This ensures that both the number of homes and businesses affected and the length of interruption are taken into account. What you ve told us so far We recognise the value that you place on having a reliable, continuous supply of water. Nonetheless, our research on priorities suggests that improvements in this area are not as high a priority for you as some other areas like sewer flooding and leakage. We know from business customers that they see water as fundamental to their ability to operate their business successfully and any issues with supply can have an impact on their profitability. What we ve achieved so far When things go wrong, our backup plan swings into action. Here in the North West, we ve pioneered the use of huge water supertankers which help keep the water flowing to your taps during an incident. With the capacity to pump one million litres of water per day back into the water network in the event of a burst pipe, we can ensure that there s minimal or no interruption to the service you receive. What s more, we ve reduced the number of interruptions to your water supply. But this number fluctuates from year to year. It increases if there is a single event affecting a lot of customers. In the year to April 2017, 120,000 customers experienced an interruption of over three hours that s about 4% of all customers. Most other water companies showed a lower level of supply interruptions over the same period and we have taken this into account in setting our targets. Our objectives and plans We re committed to carrying out more "live repairs where water continues to flow even while pipes are being fixed in the street. Furthermore, we re also focusing on innovating to improve performance. For example, we're using sophisticated monitoring techniques to detect leaks or spot problems before they escalate. Our long-term aim is to eliminate significant interruptions to your water supply. We have weighed up the costs of making improvements against the acceptability of what we re proposing on the impact on bills. We're aiming to reduce the average time that customers are without a water supply each year from 11 minutes to eight minutes per customer by This would mean that our performance is among the best of any water or wastewater company. Your options We re proposing to reduce the average time you re without a water supply to around eight minutes by 2025 which will add approximately 3 to an average bill. If we reduced the average time to ten minutes, it would add around 1 to a bill. If we aimed to reduce the amount of time your water supply is interrupted to four minutes then it would add approximately 7. Should we reduce the average time you're without a water supply to around ten minutes? Should we cut the amount of time to around eight minutes? Or should we aim to cut this figure to around four minutes? Additionally, should we prioritise this area more or less than we have prioritised other things? Reducing interruptions to supply 12 Current level Alternative Proposed target Alternative Minutes per customer

11 The options Your service How important do you consider: 3. Reducing the flooding from sewers that affects people s lives? Working on your behalf We understand how unpleasant sewer flooding can be and how much distress it can cause and we work hard to prevent it occurring in the first place. The challenges we face Our sewers collect wastewater from homes and businesses. They also collect surface water, which is the rainwater that has run off surfaces like roofs and driveways. This wastewater is then carried in the sewers to treatment works to be processed and returned safely back to the environment. Most of the time our sewers work well. But if they get blocked or if there s very heavy rain, they can occasionally become full which can lead to sewage flowing up through toilets, resulting in homes and businesses being flooded. We refer to this as flooding inside the home. The sewage can also flow up through manhole covers resulting in gardens and streets being flooded. This is called "flooding outside the home". Cities like Manchester and Liverpool have higher rainfall than other UK cities, which results in them having to contend with greater quantities of surface water. The increasing number of storms recently has added to the frequency of both types of flooding. A growing number of homeowners are paving over their gardens which increases the amount of surface water run-off which we have to deal with. In addition, flooding is also caused by some customers not understanding what should and should not be flushed or poured away. What you ve told us so far We re aware that reducing sewer flooding is something you care greatly about particularly reducing the flooding of homes and gardens. You also want priority to be given to those properties that have been flooded more than once. Although the number of people affected by floods inside and outside the home is small, you want us to take action to reduce them further. What we ve achieved so far The number of floods outside the home that occur in the North West is lower than the national average. But we still have more floods inside the home than other water and wastewater companies. We believe this is partly due to the higher rainfall that the North West receives in comparison with other regions. In addition, we ve made substantial efforts to ensure that we record all the problems that arise. Our objectives and plans We recognise that we need to do more and we re proposing to achieve a significant reduction in the number of floods that occur both inside and outside homes. Our long-term objective is to ensure that no properties will be affected by sewer flooding. Nonetheless, sometimes during times of extreme rainfall it might still be impossible to stop flooding altogether. To deal with this can be expensive particularly if we have to increase the size of sewers to cope with times of high rainfall. When it comes to reducing sewer flooding there are a number of choices immediately available to us but all have cost implications. 10

12 The options - Assisting your service customers in need For example, we can: Increase sewer capacity to deal with increased rainfall by installing tanks to hold the run-off of excess water; Regularly clean sewers to remove blockages including silt and roots; Find sewers that are in poor condition and repair or replace them; Work directly with you to reduce sewer blockages by discouraging the use of sewers to dispose of cooking fats, oils and grease as well as sanitary products and wet wipes; and Work with house builders and local authorities among other stakeholders to encourage sustainable solutions that will slow down the rate at which surface water enters sewers. One example of our innovative approach to reduce flooding is in Blackpool, where fat and grease that might otherwise be poured down drains is being given a new lease of life and used to fuel cars. We are working with Blackpool Council and schools to collect and then recycle tonnes of fat into biodiesel. Your options Currently, there are an average of 1,250 recorded incidents of floods occurring inside homes and businesses in the North West each year. Floods occurring inside and outside houses and businesses Should we reduce the number of floods occurring inside homes and businesses by around 25% while simultaneously reducing those occurring outside by 4%? Should we target a reduction of floods inside properties by around 50% while aiming to reduce the number of outdoor floods by 45%? Or should we aim to cut the number of indoor floods by around 66% while targeting a reduction in outside floods of 75%? Additionally, are there other ways you think we could tackle flooding even more effectively for example, by working in partnership with other organisations? These charts illustrate how the options you choose could potentially affect the rate at which we improve the number of floods that occur both inside and outside and what you might pay for these combined improvements. Flooding inside homes and businesses 1,400 Current level 1,200 Proposed target + 5 1, Option Number of incidents Option Flooding outside homes and businesses Current level Proposed target + 5 Option Option When it comes to floods occurring outside homes and businesses, there are an average of 8,500 recorded incidents in the North West annually. We re proposing to reduce the number of floods inside homes and businesses by 25% to around 960 floods and cut the number of outdoor floods by 4% to around 8, ,000 8,000 6,000 4,000 Number of incidents 2,000 0 If you accept our recommended proposal then an average bill will rise by approximately 5 each year between 2020 and Alternatively, we could aim to reduce the number of indoor floods by nearly 50% to approximately 635 floods while also reducing the number of outdoor floods by 45% to around 4,750 at a cost of approximately 14. Or we could go even further and reduce the number of indoor floods by two-thirds reducing the number of incidents to around 425 each year while cutting the number of outdoor floods by 75%, which would reduce the total number each year to approximately 2,250, at an additional annual cost of around 27 to an average bill. 11

13 The options Improving the North West s environment How important do you consider: 4. Reducing pollution incidents? Working on your behalf We recognise that we have a responsibility to return water to the environment safely. The challenges we face Whether it s treating and then delivering your drinking water or returning treated wastewater to rivers and the sea, the environment is fundamental to our business. Spills from our network or problems at wastewater treatment works can lead to pollution which, depending on its severity, can damage the environment. What you ve told us so far We know that you care greatly about the environment and you want us to do what we can to improve it. Furthermore, you re prepared to see a bill increase if it means that we can reduce the number of pollution incidents as a result. What we have achieved so far We take our environmental responsibilities very seriously. We have been steadily reducing the number of pollution incidents. The Environment Agency assesses all water companies performance across a range of measures, including pollution. Over the past five years, we ve consistently been ranked as one of the best performing water and wastewater companies. Our objectives and plans We intend to continue investing in the protection of and where appropriate the enhancement of the North West s environment. Our long-term aim is to prevent any harmful pollution incidents. Between 2016 and 2017, we had one of our best years in relation to serious pollution incidents. But this remains an important area of focus for us. We re aware that we haven t always got it right but we always learn from those experiences to improve what we subsequently do. Your options Currently, there are an average of 125 pollution incidents in the North West each year. We re proposing to cut this number by 20% to an average of 100 incidents each year, which will add 20p to an average bill. Or we could reduce this number by 25% to 95 incidents a year, which will cost around 60p. Alternatively, we could make even faster progress and cut the number of incidents by nearly 30% to an average of 90 each year, which will add around 1 to an average bill. Should we reduce the number of pollution incidents by around 20%? Should we target a reduction of around 25%? Or should we aim to cut the number of pollution incidents by around 30%? Reducing pollution incidents Current level Proposed Target Option 2 20p 1 Option 1 60p Pollution incidents (per year)

14 The options improving the North West s environment How important do you consider: 5. Reducing the amount of water that leaks from our pipes? Working on your behalf We ve cut the amount of water that leaks by 50% since The challenges we face We currently take 1,700 million litres of water per day from reservoirs, rivers and underground sources. However, 448 million litres of this leaks back to the environment. If we reduce this even further, then less water would need to be taken from rivers, lakes and reservoirs which could bring benefits for wildlife particularly in dry periods when river levels are low. Until now, we ve balanced the costs of reducing leakage against other ways of ensuring that we have enough water available at the lowest possible cost. What you ve told us so far We re aware that you care about reducing leakage even when this is going to cost more. When we ve spoken to home and business owners about their willingness to pay for a further reduction in leakage from our network of pipes, around 80% routinely say that they re willing to pay for improvements. However, we don t suffer from a shortage of water in the North West to the same extent as other regions in Britain and consequently reducing leakage has historically been a lower priority for us. What we ve achieved so far We delivered a particularly good performance against our leakage targets in the year to April In short, we beat our targets for the year and achieved our best ever leakage performance. But our leakage is relatively high compared to other regions. We re constantly looking for new ways to reduce leakage without a major bill impact. We aim to strike the right balance between the cost of looking for and repairing those hard to find, minor leaks from pipes against the cost of not fixing them. Our objectives and plans In the short term, major changes to the amount of water that leaks are likely to mean bill increases. This is mainly because of the expense of detecting and fixing smaller and more difficult to find leaks. We are proposing a 7% reduction in leakage by 2025, with further reductions beyond then. Your options Currently, 448 million litres of water leaks every day. Between 2020 and 2025, we re proposing to reduce the amount that leaks by 7% to 418 million litres of water a day, which will add around 1 to an average annual bill. We could reduce the current leakage levels by 10% to 400 million litres per day at an additional cost of approximately 2. Or we could reduce the total by 15% to 378 million litres per day, which would cost around 3. Alternatively, we could cut the amount of water that leaks by 40%, which will add around 13 to an average annual bill. Should we reduce the amount of water that leaks by around 7%? Should we target a reduction of around 10%? Should we aim to cut this number by around 15%? Or should we attempt to reduce leakage by around 40%? Reducing leakage Current level 450 Proposed target + 1 Option Option Million litres per day 300 Option

15 The options Improving the North West s environment How important do you consider: 6. Improving the quality of water in rivers? Working on your behalf The importance we attach to maintaining and improving the quality of water in our rivers is fundamental to our commitment to the natural environment. The challenges we face Currently, 26% of the North West s rivers are classified as good in terms of their ability to support a wide range of plant and animal life. There are a range of reasons why our rivers are not reaching their target quality. Sometimes this is because they have been altered over time, or they might have historically been affected by urban or agricultural pollution. Another reason is due to the discharge from wastewater treatment works. For example, the ammonia and phosphorus found naturally in human waste will eventually end up in rivers unless we remove them as part of the sewage treatment process. These substances can potentially be harmful to wildlife. What we ve achieved so far We recognise that improving the environment contributes to the North West s growing economy. In particular, improving the quality of water in rivers makes this region a better place for recreational activities such as walking and fishing. We ve already done a lot to improve the natural environment of the land which surrounds our reservoirs and have also been working to restore areas of moorland damaged by agricultural activities. This means that we need less costly treatment processes when we take water from them. We have also launched the "Natural Course" project in collaboration with Natural England, the Environment Agency, The Rivers Trust and Greater Manchester Combined Authority to find the most efficient and costeffective way to improve water quality in both urban and rural settings. We remain committed to improving more than 500km of rivers between 2015 and 2020 by improving the way we treat sewage, among other measures. What you ve told us so far We know that you care about the environment in which we live and work and you want us to protect and enhance it. You ve also told us that you would accept a bill increase if it meant that we could support further improvements in the quality of our rivers. Our objectives and plans Our long-term objective is to ensure that all rivers across the North West achieve good status. Most importantly, our activities must contribute to this unless it proves very costly to do otherwise. To achieve these improvements we re committed to: reducing spills from the sewer network; improving wastewater treatment processes; and working with other people like farmers to stop other pollutants entering water sources. Your options Based on our current performance, we believe that 30% of the North West s rivers will be classed as good by The Government will ultimately decide the extent to which we need to make improvements but we want your views to influence this decision. When it comes to ensuring river water quality, we could maintain our current levels of activity, which will not result in a bill increase. We re proposing to increase our efforts between 2020 and 2025 to ensure that around 45% of this region s rivers are classed as good by This approach will add around 4 to an average annual bill. Or we could aim for even faster progress when it comes to improving the quality of rivers to ensure that 65% are designated good by This would add around 8 to a bill between 2020 and When it comes to ensuring river water quality, should we maintain our current level of activity namely 30%? Should we aim to ensure that around 45% of the regions rivers are "good" by 2027? Or should we target an improvement of around 65%? Additionally, what's the right balance between improving sewage treatment processes and working with others to prevent other pollutants entering rivers? Improving river quality Current level Option Proposed target + 4 Option % 20% 40% % of rivers at good status 60% 80%

16 The options extra help for those in need Extra help for those in need How important do you consider: 7. Increasing help for those who are struggling to pay their water bill? Working on your behalf We recognise that affordability problems are often complex and affected by many factors beyond the size of your water bill. The challenges we face In addition to having areas of real economic hardship, the North West is below the UK s national benchmark for key indicators of deprivation including education and physical and mental health. We recognise that the way we respond to these challenges will be crucial to securing and maintaining your trust and confidence in us as a service provider. Against the background of rising household costs, falling wages, economic uncertainty and a decrease in the percentage of people of working age, we want to improve the scale and effectiveness of the support we offer. What you ve told us so far You care about helping those who are struggling to pay. The majority of you have told us that you are prepared to pay extra to assist pensioners struggling with their water bill. Nonetheless, many of you also feel that the impact of this financial assistance on an average bill needs to be limited. What we ve achieved so far We try to handle non-payment sensitively and identify those customers most likely to find payment difficult. When customers don t pay their bill, the money that s owed to us is referred to as bad debt. It has been estimated that this adds around 21 to the average annual water and wastewater bill for everyone else. We use leading debt management practices to keep this as low as possible and reduce the financial strain on others. Our approach has reduced household bad debt to 2.5% of our regulated revenue in the year to the end of April 2017 from 3% in the previous year. We provide assistance in a variety of different ways. For example, we: Offer discounted or capped tariff schemes; Encourage the installation of a free water meter; and Provide practical assistance to reduce the use of water. Our objectives and plans We re aware that one of the most effective ways to reduce overall levels of debt is to support people before they find themselves in this situation. To do this, we re committed to offering flexible payment plans to help customers manage their budget in the future. We are currently planning to lift 71,000 customers out of water poverty each year and intend to track our success in achieving this. This will be done by actions such as putting more people on lower tariffs, or encouraging them to have a water meter if this will reduce their bill. Your options By 2020, we believe that we ll be lifting 41,500 customers out of water poverty each year. We re proposing to help 71,000 customers each year between 2020 and 2025, which will add around 3 to an average annual bill. But if you want us to continue helping 41,500 customers each year then there won t be a financial impact. If you think that we should be helping far more people than we re proposing namely 170,000 customers each year then the additional cost will be approximately 10. Should we continue helping 41,000 customers each year? Should we aim to help 71,000 customers? Or should we aim to help 170,000 customers? Helping customers struggling to pay Currently, we help around 41,000 customers in this way. For customers in severe financial hardship, we make our Trust Fund available for one-off grants. This fund is managed by independent trustees and between 2016 and 2017, 4,144 customers were awarded a grant. Our evidence shows that 70% of customers helped through the Trust Fund continue to pay their bills 12 months later. Option % Proposed target + 3 Option , , , ,000 Additional customers helped 15

17 The options Extra help for those in need How important do you consider: 8. More initiatives to help customers who are potentially vulnerable and need extra help? Working on your behalf We recognise that many of us at different stages in life may face challenges and need help and support to deal with them. The challenges we face We realised that there was more we could do to ensure we support customers who are experiencing short or long-term personal challenges. Working closely with Age UK, MIND, The Alzheimer s Society and Citizens Advice Bureau, we identified five broad categories of vulnerability in the North West: Physical including both disability and illness; Mental health one in four people live with mental health issues at some point; Financial suffering from financial stress or disadvantaged due to financial circumstances; Language when English isn't the first language or when there are literacy or numeracy needs; and Life events such as bereavement or job loss. What you ve told us so far We know you welcome us providing help to customers in vulnerable circumstances. We have been working hard to find the best ways to reach those who will truly benefit from our assistance while also thinking carefully about the help they need. What we ve achieved so far In May 2016, we launched our improved special assistance scheme called Priority Services which is designed to adapt to the needs of people requiring help to provide the right support. Read more at: Our specialist team helps in a variety of different ways that include: Allowing you to nominate a carer or family member to discuss your account; Ensuring we re aware if there s a need to "knock and wait" so we know that if we do call at your home that we need to give you extra time to get to the door; Providing Braille, large print and talking bills; and Translation services, among other measures. There are now more than 30,000 customers registered for Priority Services across the North West. Our objectives and plans We're committed to expanding the reach of our Priority Services scheme and intend to continue working collaboratively to identify how we can improve its effectiveness. We believe that there s scope to assist 65,000 customers through Priority Services. We particularly want to expand the register of our non-english speaking customers by engaging with minority communities. More people are applying for asylum in the North West than anywhere else in Britain and 5% of this region s residents already don t use English as their first language. We are also creating internal "Priority Ambassadors" to equip volunteer employees with the training and materials they need to encourage more sign-ups in their own communities. In addition, we re training our field-based employees and third party contractors to spot and support customers in need of extra support. Your options By 2020, we believe that we ll be assisting 42,000 customers in vulnerable circumstances each year. We could maintain this level of support between 2020 and 2025, which will not have a financial impact on an average annual bill. We re proposing to assist 65,000 customers, which will add around 20p to the average bill. If you think that we should be assisting 95,000 customers then the additional cost will be around 30p. Should we continue supporting around 42,000 customers in vulnerable circumstances each year between 2020 and 2025? Should we aim to support around 65,000 customers? Or should we aim to support 95,000 customers? Helping customers in vulnerable circumstances 00% Current level Option Proposed target +20p 0 20,000 40,000 60,000 80, ,000 Additional customers helped Option 2 +30p 16

18 The options What else do you want us to do better in the future? We want to hear your views on all these eight options or simply those that matter most to you. In addition, if there s anything else that you would like us to do better in the future, please let us know. We re committed to providing you with the service that s right for you at a price that s appropriate. Our priorities and targets for 2020 to 2025 will be based on what you tell us A service shaped by you... What happens next? March 2018 We ll publish the findings of our November 2017 consultation and talk through how we plan to address some of the findings May/June 2018 We ll have further conversations with the people of the North West to specifically understand how acceptable they find our revised plan September 2018 We ll submit our final business plan submission to Ofwat, the industry regulator October 2018 to December 2018 Ofwat will be assessing our business plan January 2019 Ofwat will indicate to us and the industry its first view of our business plan December 2019 Ofwat will make its final determination on the business plan for the period Feedback Please let us know what you care most about... Use #nwmatters Don t forget Facebook: facebook.com/officialunitedutilities Go to our dedicated web page here: unitedutilities.com/nwmatters us directly on nwmatters@uuplc.co.uk Write to us at this address: North West Matters Consultation, United Utilities Group PLC, Haweswater House, Lingley Mere Business Park, Lingley Green Avenue, Great Sankey, Warrington, WA5 3LP. 17

19 United Utilities Group PLC Haweswater House Lingley Mere Business Park Lingley Green Avenue Great Sankey Warrington WA5 3LP Telephone +44 (0)