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UKWIR RG10-B – The Regulatory Cycle and its Impacts
Supply Chain Delivery
Dear Water Industry Supplier How do I complete
You are invited to participate in UKWIR's review of the impact that the 5-year AMP investment cycle has on the wate
and Wales, through the completion of this confidential questionnaire. The results of this questionaire will be used b
to guide future policy and practice and could help to reduce the negative impacts on businesses like yours, of the st
have prevailed in the water industry since privatisation.
Although none of the information you provide will be published in any way which will enable you or your company to
wish, submit your response anonymously, by omiting your company name and contact details from section1.
Your response could make all the difference. If your business is involved in supplying produc
industry in England and Wales, this project represents a real opportunity to influence future plan
industry's investment programmes in a way which could benefit your business and the industry a
If you have any questions at any time about the survey or procedures, please contact:
Karen Simpson Mouchel Parkman
Telephone: (01285) 850 415
email: karen.simpson@ewan.co.uk
It would be appreciated if you could return your completed questionnaire to Karen Simpson at the above email addre
possible, and by no later than;
Friday 27th April 2007
How to complete this questionnaire
There are four separate worksheets containing a variety of styles of questions, you may work your way through the s
ensure you have completed each sheet to the best of your ability before submitting the questionnaire. Clicking on th
page will take you to each respective worksheet.
We recommend that you hide the MS Excel formula bar whilst working on this spreadsheet by clicking on View and
check it.
Each worksheet is protected so that you can only enter data in the appropriate cells.
Yellow cells like this require you to type a response, this may be cost data, percentages or free form text.
Orange cells like this require you to pick from a list of potential responses, please pick the one which best represent
To aid navigation around the worksheets, the data
entry area is bounded by grey cells and a page
end marker appears at the bottom of each page.
To aid navigation around the worksheets, the data
entry area is bounded by grey cells and a page
end marker appears at the bottom of each page.
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At the top of each page is a link which will take you back to this instructions page Click her
The four sections are as follows:
If you click on the relevant cell below it will take you to the appropriate page
1. General Information Describes the type and size of organisation you are, provides contact details for any foll
research contractor may have, and provides an overview of your opinions on the regulat
England and Wales
2. Financial Information Requires you to provide a simple breakdown of your turnover over a seven year period f
information will allow us to ascertain your position in the supply chain, your dependency
Wales as a market for your services and the high level impacts of the cycle on your bus
Responses will be able to be aggregated to give an industry wide view.
3. Business Impacts Requires you to provide an insight into the particular areas in which your business is imp
asks you to estimate the cost increase (or savings) which resulted - to be expressed as
asked to consider the % of those increases or savings which you passed on to your cus
supply chain organisations). Please think carefully about your response to this question
place within the supply chain which may prevent such cost increases being passed on o
through savings when they arise. Your comments on the reasons why costs or savings m
supply chain will be very helpful.
4. Future Intentions It is vital that this project not only looks at past impacts on the supply chain but also look
experience over past AMP cycles is influencing your future plans with respect to the wat
series of statements and observations with which you are requested to indicate your stre
(by placing an 'X' in the appropriate box). If you have no strong views you can mark the
relevant to your business you can mark the 'Not applicable' box.
We would like to thank you, in anticipation, for your contribution to this project.
Cycle and its Impacts on the Efficiency of
Chain Delivery
How do I complete this questionnaire?
nvestment cycle has on the water industry supply chain in England
this questionaire will be used by Ofwat and the water companies
businesses like yours, of the stop-start investment patterns which
enable you or your company to be identified; you may should you
ct details from section1.
volved in supplying products or services to the water
nity to influence future planning and delivery of the
business and the industry at large.
mpson at the above email address as soon as
estionnaire
may work your way through the sheets in any order but please
he questionnaire. Clicking on the relevant links further down this
dsheet by clicking on View and clicking on Formula Bar to un-
ges or free form text.
ck the one which best represents your view or opinion.
Click here to return to instructions
n. Abcdef
provides contact details for any follow up questions which the UKWIR
iew of your opinions on the regulatory cycle within the water industry in
urnover over a seven year period from 1999-00 to 2005-06. The
he supply chain, your dependency on the water industry in England and
el impacts of the cycle on your business.
dustry wide view.
areas in which your business is impacted by the investment cycle and
hich resulted - to be expressed as a % of your turnover. You are further
s which you passed on to your customers (water companies or other
out your response to this question - there are clearly mechanisms in
cost increases being passed on or may reduce the willingness to pass
the reasons why costs or savings may not be transmitted through the
s on the supply chain but also looks forward to ascertain how your
uture plans with respect to the water industry. This section presents a
are requested to indicate your strength of agreement or disagreement
no strong views you can mark the 'Neutral' box - if the statement is not
cable' box.
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to this project.
Click here to return to Instructions
1.1. Company Details
Company Name
Contact Name
Role in Organisation
Contact E-mail
Contact Phone Number
Turnover f.y. 2005-06 (£) Nr of Employees (05-06)
Business Category (pick the one which
most closely fits your business)
Brief Description of Services
Provided
W hich Geographical Regions do you NW NE Midlands
operate in? - place an 'X' in the
relevant boxes East Anglia SW SE
W ales Scotland N. Ireland
Rep. of Ireland Other EU International
Has the structure of your business
changed significantly (e.g. through
merger or acquisition, de-merger,
divesting of businesses e.t.c.. ...) in
the period since April 1999? Please
provide a brief description
1.2. How would you describe the 1.3. Are the impacts of the cycle generally the same
impact on your business of the stop- in all areas or do they differ from one water
start nature of investment in the company to another?
1.4. If your experience is that the impacts of the cycle are different depending on the water company you are providing
services to, please provide one example where the impact is lowest and one where it is greatest and indicate why you
think that is so.
Lowest impact of cycle on our business is in
We think that this is because;
Highest impact of cycle on our business is in
We think that this is because;
1.5. If the industry acted to reduce uncertainty, leading to a more consistent expenditure profile (e.g. increase in Yrs 1
and 2, relative decrease in Yrs 3,4 &5 of the AMP cycle), together with longer term visibility of workload (e.g. > 2yrs) -
what level of efficiency savings (as a % of your turnover) do you estimate you could offer to your customers?
Potential efficiency saving as % of your turnover
1.6. Please use the space below to explain where you think those efficiency savings would be generated and to add any
additional comments which you feel might be useful in understanding the impacts of the regulatory cycle on the
efficiency of supply chain delivery or in identifying potential solutions to the problems your business has faced.
Efficiency
savings
Additional
Comments
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2.1. Please indicate your total annual turnover, as reported in your annual accounts, for each of the seven years below and the proportion of
your turnover arising in the regulated, water and wastewater market in England and Wales (exclude income from developer work i.e.
installation of adoptable sewers and distribution mains). Please also indicate your level of satisfaction with the profitability of that work in
the regulated, water and wastewater market in England and Wales
Year Total annual turnover Proportion of turnover in regulated water Which term best describes your profitability in the year in
£ and wastewater market in England and question?
(put the actual amount e.g. £5,000,000 not £5M) Wales %
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2.2. Has there been any discernible trend in the average number of years of relevant industry
experience amongst your staff over the period since 1999-00 ?
2.3. What percentage of your turnover, within the regulated % 2.4. What percentage of your turnover, within the %
water sector in England and Wales, is generated by the regulated water sector in England and Wales, arises
following types of contract from work for the following groups.
Long-term framework agreements (>5yrs) % turnover from work directly for water companies
Framework agreements (2-5yrs) % turnover from work directly for contractors
One off contracts / commissions % turnover from work directly for consultants
Other % turnover from work directly for other suppliers
0% 0%
2.5. What percentage of your turnover, within the regulated % 2.6. What percentage of your turnover, within the %
water sector in England and Wales, do you sub-contract and regulated water sector in England and Wales, is
to what type of organisation. in the clean / wastewater sectors.
Sub-contract to consultants Clean water treatment, supply or distribution
Sub-contract to contractors Wastewater collection, treatment or disposal.
Sub-contract to other suppliers 0%
0%
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3.1. Describe how your business has experienced the water industry investment cycle 1999-00
in England and Wales since the end of the AMP2 period (March 1999) in terms of the 2000-01
volume of business relative to your capacity during each year of the period? 2001-02
2002-03
2003-04
2004-05
2005-06
3.2 What were the impacts on your business during the DOWNTURN in (1) (2) (3) (4) (5)
investment during the AMP3 period (April 2000- March 2005)? Did your How did this As a % of your annual What % of the cost If you DID NOT pass on ALL or MOST of the
business affect your turnover, what would you increase / saving cost increase or savings to your customers -
In column (3) we would like you to provide an estimate of the additional
experience costs? estimate the cost increase / would you estimate what prevented you from doing so (e.g.
cost or saving to your business expressed as a % of your turnover If you this impact? saving to be as a result of was passed on to competition, rates already fixed, need to
are unable to estimate these costs or savings column 3 may be left blank but this impact on your your customers? maintain margins e.t.c.)
PLEASE ensure you fill in the other columns in the table to the best of your business? (%)
ability. (%)
Suffered reduced productivity as a result of retaining staff with insufficient
workload.
Had to make permanent staff redundant during downturn in work.
Had to reduce numbers of contract staff during downturn in work.
Had to redeploy staff to other market sectors during downturn.
Reduced proportion of work outsourced to other businesses
Negotiated reduced rates with sub-contractors / suppliers
Reduced expenditure on training
Reduced number of shifts worked
Closed premises / production facilities
Delayed investment in new products, systems or processes.
Had difficulty retaining staff due to loss of confidence / morale.
Others (please specify)
Others (please specify)
Others (please specify)
Others (please specify)
3.2 What were the impacts on your business during the UPTURN in (1) (2) (3) (4) (5)
investment during the AMP3 period (April 2000- March 2005)? Did your How did this Expressed as a % of your What % of the cost If you DID NOT pass on ALL or MOST of the
business affect your annual turnover, what increase / saving cost increase or savings to your customers -
In column (3) we would like you to provide an estimate of the additional
experience costs? would you estimate the would you estimate what prevented you from doing so (e.g.
cost or saving to your business expressed as a % of your turnover If you this impact? cost increase / saving to be was passed on to competition, rates already fixed, need to
are unable to estimate these costs or savings column 3 may be left blank but as a result of this impact on your customers? maintain margins e.t.c... ….)
PLEASE ensure you fill in the other columns in the table to the best of your your business? (%)
ability. (%)
Experienced increased productivity as a result of increased workload.
Recruited permanent staff directly (i.e. through advertising, career fares e.t.c...)
Recruited permanent staff through recruitment agencies
Employed more agency / contract staff
Redeployed staff from other market sectors during upturn.
Increased proportion of work outsourced to other businesses
Had to pay higher rates to sub-contractors / suppliers
Increased expenditure on training of inexperienced staff
Increased number of shifts worked
Opened premises / production facilities
Invested in new products, systems or processes.
Experienced pressure on salary costs, due to shortage of experienced staff.
Others (please specify)
Others (please specify)
Others (please specify)
Others (please specify)
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4.1. Considering the next 5-10 year period, describe your future intentions with respect to the water industry market in England and W ales and how your business
perceives the level of risk and uncertainty associated with the sector and how you propose to deal with it?
Consider the statements below and then indicate the strength of your agreement with the Comment
Strongly Disagree
statement by placing an 'x' in the appropriate box - use the comments box if you wish to
Strongly Agree
Not applicable
clarify or qualify your response.
Disagree
Neutral
Agree
If you have no strong opinion please mark the 'Neutral' box but if you do not feel the
statement is relevant to your business please mark the 'Not applicable' box.
1 We are confident that the industry will act to reduce or eliminate the investment "roller coaster",
leading to a smoother more sustained investment profile in the transition from AMP4 to AMP5
2 If the situation shows no sign of improvement we would consider pulling out of the water and
wastewater sector in England and Wales by 2010
3 If the situation shows no sign of improvement we would consider pulling out of the water and
wastewater sector in England and Wales by 2015
4 There is significant scope to improve the efficiency of delivery if the industry acts to reduce or
eliminate the investment "roller coaster"
5 There is little scope to improve efficiency of delivery without reducing the quality and reliability of
our products or services - therefore prices need to rise to secure the long-term viability of the
supply chain.
6 The uncertainty caused by the regulatory cycle means that the water sector in England and Wales,
is seen as considerably more risky than any other sector within which we operate.
7 We expect our water and wastewater business to grow as a result of overall growth in the water
industry market in England and Wales
8 We expect our water and wastewater business to grow as a result of growing our market share in
the water industry market in England and Wales
9 We expect our water and wastewater business to grow as a result of growing our market share in
the water industry market in Scotland and or Northern Ireland
10 We expect our water and wastewater business to grow as a result of non-UK growth.
11 We do not expect to see significant growth in our water and wastewater business
12 We are planning to reduce our reliance on work in the water and wastewater sector in England
and Wales, through diversification into other water and wastewater markets.
13 We are planning to reduce our reliance on work in the water and wastewater sector in England
and Wales, through diversification into non-water and wastewater markets.
14 We are likely to make significant investment in new products and services to meet the long term
challenges which face the water and wastewater sector in England and Wales.
15 Uncertainty as to the future level and timing of spending by water companies is a significant
barrier to investment in training and development of staff
16 We are confident that there are sufficient skilled trades-people available to the industry to deliver
the AMP4 programme (from 2005 to 2010).
17 We are confident that there will be sufficient skilled trades-people available to the industry to
deliver the AMP5 programme (from 2010 to 2015).
18 We are confident that there are sufficient professionally qualified people available to the industry
to deliver the AMP4 programme (from 2005 to 2010).
19 We are confident that there will be sufficient professionally qualified people available to the
industry to deliver the AMP5 programme (from 2010 to 2015).
20 We will become increasingly reliant on non-UK resources and suppliers to meet future peaks in
water and wastewater workload in England and Wales.
21 We will plan our business to meet the 'troughs' in the AMP cycle, recognising that we may not
have capacity to deal with the 'peaks'.
22 We are likely to decline to tender for work from water companies which do not act to reduce the
costs and uncertainty of tendering for future work.
23 If water companies offered longer term frameworks which span the AMP periods and more
visibility over forward workload, we would be able to deliver improved efficiency through innovation
and development.
24 Pressure to maintain lower household bills for water and wastewater services is leading to
unrealistic efficiency targets which the industry cannot sustain in the long-term.
25 Suppliers should work with water companies to determine realistic efficiency targets which are
robust enough to meet regulatory scrutiny - affordability issues would then be addressed through
the scope and pace of delivery of long-term investment programmes not through pressure on unit-
costs.
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