Water firms are prioritising supply chain support, says British Water

“Looking after and protecting the supply chain is one of our top priorities,” South West Water chief executive and British Water chair, Chris Loughlin, told supply chain companies on Friday. He was giving an update to British Water members dialling into a video call hosted by the trade body’s chief executive Lila Thompson, on Covid-19 impacts.

Loughlin (pictured) said the CEOs of the water companies were speaking frequently during the pandemic and had the need to support the supply chain “absolutely in their minds”. He said they were working together to “draw up a protocol or some principles about how we’ll maintain cash flows going to the supply chain” because “we absolutely, essentially, need the supply chain to be there when we come out of this.” He gave an example that the contract of one contractor “in real difficulty” had been modified to ensure it is paid on time, and paid even if there are disputes as these would be addressed later.

Loughlin also spoke in the call – a now regular event that last week featured Ofwat’s chief executive Rachel Fletcher, the Environment Agency’s Toby Willison, and Water UK’s Sam Larson – about service metrics including Outcome Delivery Incentives. “Clearly they’re going to be hit,” he said, and suggested it would help to put some principles in place on how decisions should be taken and activities prioritised over the coming weeks and months.

In a separate move, Yorkshire Water said last week than from 1 April, it would pay all SMEs (with 250 employees or fewer) immediately rather than the normal payment terms of 42 days to help them through the coronavirus outbreak. That now applies to the 251 SMEs Yorkshire works with regularly, where its spend is £77m a year.

Andy Clark, head of procurement at Yorkshire Water, said: “By changing the way we pay our smaller suppliers, we can give them a quicker financial boost when they really need it the most.”