Guernsey Water Annual Report 2016

Guernsey Water 2016 Annual Report FIRM FINANCIAL FOUNDATIONS 18 annualreport2016 FIRM FINANCIAL FOUNDATIONS Performance Highlights Our priority was to ensure that we are in a strong financial position to meet the demands of all our stakeholders including customers, the States of Guernsey and staff. We made efficiencies this year to help us achieve this. Following the decision of the States that Guernsey Water should pay for the Belle Greve outfalls, a review of our future cash flows was carried out to assess the impact of refinancing this investment on our customers. We concluded that we could constrain bill increases and still deliver our business plan if we are able to achieve significant efficiencies across our business before 2020. States’ trading assets are expected to provide a return on investment to the States of Guernsey and work has been carried out to identify the nature and level of these returns. This included an assessment of the one-off £1.5m distribution from our property reserve that was returned to the States in 2016. Important work has also been carried out to ensure that budget holders are empowered to make informed decisions when managing their budgets and they understand the impact their decisions have on the business as a whole. Budget holders have been trained in budget forecasting so that the leadership team has good information on which to base financial decisions during the year and into the future. We carried out funding and tariff benchmarking against similar businesses in Jersey and the UK and a successful tender process has concluded for efficiency benchmarking against other water utilities. These two reports will inform the development of our financial strategy. We have also progressed our energy efficiency initiative to reduce our power costs. Guernsey Electricity estimate that work we did with them last year to ensure our sites are on the right electricity tariff could save us £26k in 2017. We will also be working with Guernsey Electricity Benchmark our services to ensure we are providing value for money Review our financial strategy to balance delivery of our plan against affordability for customers Our operations and services are efficient, investment in our assets is affordable and an appropriate return on investment is available to the States of Guernsey 6 CASE STUDY Tracking our Performance with Scoreboard Scoreboard is a software system continually tracking performance in line with our business plan outcomes. Each outcome has key performance indicators (KPI’s) assessed against a red (target missed), amber (satisfactory progress - not all targets met) and green (on target) score. Each KPI is weighted based on its importance to the business and our stakeholders with a score for each individual outcome. £300k WE EXCEEDED OUR ANNUAL EFFICIENCY ANDSAVINGSTARGET