Following the introduction of the new water sector law, and sector reform, the Authority for Public Services Regulation (APSR) required support for the first significant Price Control. The Regulator was newly formed and lacking resources and required support for the first review of Capex from the previous period. The newly formed companies were under-going transformation, and were learning about how regulation was starting to impact their business.
We developed an audit programme to undertake a comprehensive review of the previous Capex investments made by the companies. This also included a detailed review of the end-to-end Capex planning and delivery processes. Sample projects were selected for deep dives to understand the process undertaken and the changes and contract implications on the realisation of the projects.
Each process stage was benchmarked to best practice and assessed in terms of efficiency. The review also included a detailed assessment and benchmarking of the companies’ project costs, again to assess efficiency of the planning and delivery.
Detailed reports were produced for each company and for the Regulator, which provided numerous recommendations on short, medium and long-term company and sector improvements; recommendations for the upcoming Price Control; and actions for the APSR to take immediately. Presentations and summary reports were provided to the APSR Directors and Managers and support and training were given to APSR staff.
A number of key elements were also developed to support the APSR with the upcoming Price Control, e.g. a Service Measure Framework was developed to align performance across the sector and enable consistent future assessment of all investments.
The process engaged all of the sector companies and raised awareness on how the future regulatory regime would impact on the companies and how they need to improve their capabilities going forward. Support was also given to the APSR who now have a clear strategy for how to manage and assess the future Price Controls, and itself needed to transform and change the sector as a whole.
