CCG Terms of Reference

The Terms of Reference for the Southern Water Independent Customer Challenge Group (CCG) has been revised and updated in light of changing requirements at Southern Water at the close of AMP6 and for the start of AMP7.

The revised Terms of Reference are for technical accuracy regarding roles and responsibilities in the last stage of the PR19 process and have been agreed by the CCG and the Southern Water Board. They are based upon the Ofwat Customer Engagement Policy Statement and Expectations for PR19 (May 2016).

Purpose

The Southern Water Customer Challenge Group (CCG) for PR19 will provide independent challenge and advice to the Board on the Company’s customer research and stakeholder engagement programme and the performance commitments made during the price review and have an additional advisory role providing advice and challenge around Southern Water’s affordability work.

The Customer Challenge Group shall be the name used for all functions and in all reports. The specific functions regarding PR19 are subject to Ofwat guidance and requirements and will be updated accordingly as and when required.

 The Southern Water Customer Challenge Group (CCG) for PR19 will provide independent challenge and advice to the Board on the Company’s customer research and stakeholder engagement programme and the performance commitments made during the price review and have an additional advisory role providing advice and challenge around Southern Water’s affordability work. 

The Customer Challenge Group shall be the name used for all functions and in all reports. The specific functions regarding PR19 are subject to Ofwat guidance and requirements and will be updated accordingly as and when required. 

 The Southern Water Customer Challenge Group (CCG) for PR19 will provide independent challenge and advice to the Board on the Company’s customer research and stakeholder engagement programme and the performance commitments made during the price review and have an additional advisory role providing advice and challenge around Southern Water’s affordability work. 

The Customer Challenge Group shall be the name used for all functions and in all reports. The specific functions regarding PR19 are subject to Ofwat guidance and requirements and will be updated accordingly as and when required. 

Duties

The CCG will work with the Company throughout the PR19 process to provide independent challenge to the Company and independent assurance to Ofwat on:

  • the quality of the Company's customer and stakeholder engagement for PR19; and
  • the extent to which the results of this engagement are driving decision-making and are reflected in the Company's final business plan for 2020-25.

In particular, this will include the following:

  • Has the company developed a genuine understanding of its customers’ priorities, needs and requirements – and where appropriate customer valuations – drawing on a robust, balanced and proportionate evidence base? Has the company engaged with customers on the issues that really matter to them?
  • Where appropriate, has the company engaged with its customers on a genuine and realistic range of options? For example, in relation to a need to rebalance supply and demand, this might include increasing its own capacity, purchasing water from another company or demand management options. Where appropriate, has the company considered how customers could help co-create and co-deliver solutions to the underlying challenges.
  • Has customer engagement been an on-going, two-way and transparent process, where companies are informing their customers as well as soliciting feedback from them?
  • Has the company effectively engaged with and understood the needs and requirements of different customers, including those in circumstances that make them vulnerable? Has the company considered the most effective methods for engaging different customers, including those that are hard to reach?
  • Has the company effectively engaged with its customers on longer term issues, including resilience, impacts on future bills and longer-term affordability? Does the business plan adequately consider and appropriately reflect the potential needs and requirements of future customers? Wherever appropriate, has the company engaged with its customers on the long-term resilience of its systems and services to customers?
  • Has the company effectively informed and engaged with customers on its current levels of performance and how does this compare to other companies in a way customers could be expected to understand?
  • Has the evidence and information obtained from customers (including through the company’s day-to-day contacts with customers) genuinely driven and informed the development of the business plan to benefit current and future customers? What trade-offs (for example between different customers) have been identified and how has the company proposed to deal with these?
  • Has the company developed a clear understanding of who its stakeholders are, consistently engaged with them in ways that stakeholders find appropriate and taken proper account of their views in the plans made and actions taken?
  • Commentary on any concerns the CCG process has highlighted regarding tensions between delivery of the proposed plan and compliance with statutory environmental and drinking water quality obligations.
  • How has the company identified and targeted those consumers who are, or might become, vulnerable and have products and services, including the social tariff, been developed in ways which meet these needs?

The CCG will provide an independent report to Ofwat at the same time as the company submits its business plan in 2018 covering the above issues.

The CCG is not expected to challenge or assure costs (including operating costs, financing costs or whether the costs associated with new schemes are efficient).

The CCG will also have a duty to report annually to the Board on:

  • the advice and challenge it has offered on the development of the business plan and how it is reflective of customer and stakeholder priorities;
  • the Company’s response to advice and challenge given by the CCG.

 

Authority

The CCG is an independent panel. Its authority to carry out its duties as outlined in these Terms of Reference is given by the Board and by Ofwat with regard to the requirements for PR19.

The CCG will meet at least four times a year with members of the Executive Management Team (EMT) and, as a minimum, the CCG Chair will attend Southern Water Board meetings at least twice a year to provide a formal report on the CCG’s work and its view on the Company’s performance in relation to the duties of the CCG. The CCG Chair has open access to the Board Chairman and other NEDs, who are also invited to attend a CCG meeting should they wish.

Chair

The CCG Chair is recruited using a best practice recruitment and selection process, including advertising. The Chair is appointed by the Chief Executive Officer (CEO) of Southern Water on behalf of the Board. The Chair of the CCG is independent of all other interests in the Company and acts in an individual capacity.

The Chair has a job description which includes responsibility for shaping agendas and commissioning papers for the CCG meetings.

Membership

An independent search agency is employed to help identify and select appropriate members, who are interviewed by the Chair and CEO and appointed by the CCG Chair, in consultation with the CEO. Members have a job description which lays out their responsibilities.

Membership of the CCG is constructed to provide it with a wide range of knowledge and experience of the issues affecting customers within the Company’s region of operation, the water sector, the UK utilities sector, and the wider economy.

Additionally, each member of the CCG will possess significant knowledge in one or more of the following areas:

  • Customer advocacy / community engagement
  • Debt advice
  • Customer research
  • Behavioural change
  • Business planning / strategy
  • Environmental concerns

CCG members are both independent of the Company and are appointed on an individual basis. CCG members are not appointed to represent any particular organisation nor specific interest group. Members are appointed based on their background, expertise and experience. The sole exception is that a representative for CCWater is included amongst the members of the group as required by Ofwat.

A conflicts of interest register is maintained and published on the web site. Any specific conflicts of interest which members think they may have, following a change of circumstances or in relation to specific agenda items in meetings or in any other way which could conflict with their role as a member of the CCG, are identified and recorded in meetings.

Members of the CCG will be expected to attend all meetings in person (deputies are not permitted). The Chair is contracted on a retainer basis (with a fee that is in line with Board NED fees and on the expectation of making up to a day a week available for CCG business) and CCG members are paid a day rate for attendance at meetings. The Chair and all members are reimbursed for all reasonable expenses incurred in relation to their membership of the CCG.

Including the Chair, the CCG membership will be between 8-12 people.

Quorum

The quorum necessary for the transaction of business shall be five. In the absence of the Chair, the Chair may nominate a deputy to chair a meeting. If the Chair is unable to do so, the members may elect a Chair for the meeting. A duly convened meeting of the CCG at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in, or exercisable, by the CCG.

Secretary

To ensure its efficient operation the Company will provide a sufficient secretariat function for the CCG.

Frequency of meetings

The CCG shall meet, as a minimum, six times a year.

Notice of meetings

Meetings of the CCG, other than those regularly scheduled as above, shall be summoned by the Secretary of the CCG at the direction of the Chair.

Meeting dates, times and venues shall be advised no less than twenty-one days in advance of the meeting. In exceptional circumstances, meetings can be called at shorter notice, at the discretion of the CCG Chair.Unless otherwise agreed, meetings shall take place at Southern Water premises.

An agenda of items to be discussed and supporting papers shall be forwarded to each member of the CCG and any other person required to attend, no later than seven days before the date of the meeting.

Any three members may request an urgent meeting by writing to the Chair. The request should specify the purpose of the meeting. The discretion to allow such a meeting rests with the Chair.

Minutes of meetings

The Secretary shall minute the proceedings and resolutions of all meetings of the CCG, including recording the names of all those present and in attendance. Minutes of meetings shall be circulated promptly to all members of the CCG for agreement.

Observers

Other bodies or individuals can be invited to attend CCG meetings as observers. Observers can participate in discussions but are not members of the CCG. Observers can be asked to leave the meeting during periods when the information being discussed is of a sensitive or confidential nature.

Invitations to observers to attend CCG meetings are at the discretion of the CCG Chair.

The quality regulators (Environment Agency, Drinking Water Inspectorate and Natural England) will be invited to attend the CCG from time to time (and no less than once a year) to report directly to the CCG on the company performance against statutory objectives. These regulators are also invited to request attendance at the CCG at any time they consider helpful or appropriate.

Transparency

There will be a presumption of publication on this website for all materials relating to the CCG; including in particular:

  • Terms of reference
  • Member biographies
  • Remuneration and expenses
  • Register of conflicts of interest
  • Dates of meetings and attendance records
  • Minutes of meetings
  • Agendas and papers for meetings (subject to any matters of commercial confidence)
  • CCG advice notes to the Board and Company responses
  • CCG reports to Ofwat and the Board

Governance

The CCG shall be responsible for periodic reviews of its operational performance and, at least annually, review these Terms of Reference to ensure it is operating at maximum effectiveness. The CCG will recommend any changes it considers necessary to the Southern Water Board for approval.

The Southern Water Board is not obliged to adopt all of the recommendations or act in response to all of the challenges from the CCG. Where this is the case, the Board will publish its reasons.

 
 
 
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