A View From the Top: Peter Simpson, CEO of Anglian Water

The utility company’s boss on responsible business and Labour's plans to nationalise the water industry. Maggie Pagano reports

Unlike most chiefs, Simpson also talks a lot about the ‘social contract’ between his employees and the company (Anglian Water)

Whatever is in the water at Anglian Water must be pretty special as Anglian’s boss, Peter Simpson, has once again been crowned one of the UK’s best chiefs to work for by Glassdoor, the jobs site.

The country’s biggest water and water recycling company by geographic area has also just beaten Google, Ikea and Apple to be voted the best place to work in the country for 2019, and ranked the UK’s top utility company by its peers. If that’s not enough of an accolade, Anglian also came in first place in the industry league tables for customer service and won Business in the Community’s Responsible Business of the Year 2107 for its environmental and social work.

It’s a great feat for Anglian, particularly as water companies are so often regarded the whipping boys of the utilities industry. So what is Simpson’s secret? He is delightfully modest: “We genuinely look after everyone, all our staff, and encourage employee wellbeing. What we try to do is create a culture driven by happier, healthier and safer staff. And I treat everyone as I would like to be treated.”

What’s more, the 51-year-old practises what he preaches. Anglian runs regular awareness days for its 5,000 staff, provides them with free financial advice, holds workshops on mental health, offers employees weight loss programmes and yoga classes, and encourages staff to create their own gardens at work.

Unlike most chiefs, he also talks a lot about the “social contract” between his employees and the company, and Anglian’s six million customers spread from the east of England up to Hartlepool in the north.

Anglian not only covers a huge geographic region, but it is also one of the country’s most challenging areas for water supplies: it has the fastest growing population in the UK, with 1.5 million homes due to be built in the region over the next 20 years, and one of the driest microclimates in the land.

It has a third less rainfall than the rest of England and, in some parts, a rainfall lower than Jerusalem. Yet despite this year’s long, dry summer, which led to an extra 200 million litres of water a day being used, there were no shortages.

To ensure the future, Anglian is investing another £500m to develop a new interconnected network of pipes and underground reservoirs to move water around the region more easily. It’s started work on building the Graham Resilience Project, one of the biggest reservoirs in Europe, to store 44 million litres of treated water.

Saving every drop of water is one of Simpson’s top priorities. Anglian already has one of the lowest leakage levels, but he wants to cut leaks to be the lowest in the world. To achieve this, he is using a combination of hydrophone technology used by the US navy to detect the most difficult leaks, intelligent pressure controllers and smart water meters. “There’s no point just talking to customers about saving water unless they see what it is we are also doing to save water with our innovations.”

As well as keeping the water flowing, he sees solving the high youth unemployment in towns like Wisbech as part of the social contract he talks about. It’s why Anglian works closely with local colleges, such as the College of West Anglia, to run specialised apprenticeship schemes. At the same time, Anglian works with the local community to regenerate the area, which is, he points out, one of the most deprived in the country, where some children have no teeth because of poor living conditions.

Simpson has water running in his bones. Brought up in West Runton on the north Norfolk coast, his father worked for Anglian. He trained as an analytical chemist, and his research speciality was looking at low levels of chemicals, which can impact taste and smells in drinking water.

He joined Anglian for a summer job in the laboratories and never left, going on to work around the world for the company in Indonesia, the Czech Republic, the US and Brazil and then back into senior management .

Until now, he has kept schtum about Brexit. But after recent scare stories that water supplies might be cut in the event of “crashing out” with no deal, he feels it’s time to speak up. “The deal on the table is as good as it’s going to get, and we support it.”

Whatever the outcome of Brexit – soft, hard or plain messy – it won’t be a dry one. Anglian has been gaming worst-case scenarios to make sure it has enough supplies of the imported chemicals needed, such as the vital chlorine, were there to be any gridlock at UK ports. “We are committed to ensuring no impact in a hard Brexit on our customers – as they should expect. We are working with other water companies very closely on this.”

Fears that the UK’s water quality will suffer when and if we leave the EU are misplaced, he says. Not only is the UK a world leader in water safety and cleanliness, he says, but the industry has always gone “beyond what was required by the EU”.

Indeed, Simpson adds that the UK’s environmental controls on water – and the regulated framework around the industry – are the “envy of the world” and will not slip whatever the Brexit outcome.

As if Brexit weren’t tricky enough, Simpson – and his fellow water bosses – have other fish to fry: how to fight off Labour’s promise to nationalise the industry, top of its “to do” list should the party gain power. It’s a controversial plan because the takeover value of the UK’s 25 water companies would be about £90bn. If debt is excluded, that figure could be halved, although the liabilities would still have to be transferred to the government’s balance sheet, making the water industry one of the most expensive bits of the state’s armoury.

There’s a more powerful reason that the industry is dead against public ownership: that nationalisation could lead to lower investment, lower productivity and higher bills for customers.

Indeed, Simpson argues that the status quo is compelling. Since 1994, productivity in the water and sewerage industry has increased by 64 per cent, while more than £100bn will have to be invested over the next 25 years to keep the infrastructure up to date, a huge amount that no government is likely to commit to.

Yet Simpson takes the Labour threat seriously. “The way I look at Labour’s policy is to ask, what is the problem that they are trying to solve with nationalisation? If we, the industry, understand that better, then the industry can help these issues be addressed.”

It’s worth remembering, he says, the low levels of investment going into the industry before privatisation compared with the high levels of investment going into the industry today. Anglian has committed £6.5bn of investment from 2020 to 2025.

But Labour’s threat and criticism over high dividends being paid to foreign owners has given water companies a good kicking, forcing them to look beyond their navel, even the saintly Anglian.

Simpson has done his own house-cleaning too. At the recent half-year results, Anglian passed on the dividend, using the funds to reduce debt. He also removed the controversial Cayman Island subsidiary from its corporate structure. “This stuck to us like a barnacle, even though we didn’t use it. So we got rid of it: liquidated it. I don’t ever want to talk about it again.”