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UTILITY WEEK | DECEMBER 2020 | 21 Policy & Regulation the purpose of the work to come out of the fund, which Ofwat says it wants to be trans- formational, though it wasn't clear to partici- pants what that meant. One chief executive remarked: "Work that comes out of the inno- vation fund should be classed as a national triumph, not just a water sector triumph. It should apply to other sectors as well, so we can show what the water sector can do as a leading innovator within the regulated sector." Another observed: "It should be transfor- mational and go over and above day-to-day problems though I'm not sure what transfor- mational is at the moment – you have to be able to describe that success and if you can't do that, I'm not sure the fund has served its purpose." Ofwat responded that there could not be a black and white answer to this. "Some of the things we expect to see in there, like digital transformation of net- works, they could be transformational for infrastructure full stop and that could be a global success story." It added: "Innovation which could be considered 'a triumph for the sector' would be enough to start with." Another chief executive was uncertain as to why the objectives of his business plan would not be eligible for innovation, "even though consultation with customers for the plan proved these are the outcomes custom- ers want". Ofwat again explained that this was not a cut and dried process, explaining that there "The Innovation Fund is paid for by customers – they should be involved in deciding how it's spent." Column Stuart Brand VP water and market services, CGI continued overleaf in association with I t is beyond debate that the water industry faces a number of significant challenges in the years ahead. We can't survive without water, but the provision of clean and reliable water services into the future will have to cope not only with the changing climate and customer demand, but also with changes in customer attitude and their belief about what represents a legitimate purpose. Throughout history, societies and organisations have responded to challenges by innovat- ing, and the same will be true for the water sector today. Ofwat has recognised the key role played by innovation in ensuring the delivery of its strategy, and the develop- ment of the Innovation Fund is a key pillar of its plan. Perhaps unsurprisingly the industry has responded positively to the fund and the opportunities it brings – aer all, this is customers' money and if it is going to be an addition to what bills would otherwise have been, then the companies will want to make sure that they gain full advantage of it. Otherwise it is simply a missed opportunity. Recognising the role that customers have in fund- ing this exercise, one outstanding question might be to ask: what role should they play in the Innovation Fund process? Seeking customer input has been a key activity in the formulation of company business plans through PR19, allowing the industry to rightfully claim that com- panies have the agreement of their customers towards their planned priorities, desired outcomes and proposed charges. To what extent should those operating and participating in the Innovation Fund seek customer input: both in terms of the strategic objectives on which they choose to focus, and the activities that they choose to undertake? Maintaining and enhancing customer trust is a key priority for the industry. In developing the mechanisms to choose the initiatives that will receive funding, and the criteria against which that funding will be judged as having been successful, the involvement of customers is key. Spending £200 million of customers' money on innovation may seem like a sensible course of action and indeed a good investment, but to be fully legitimate the industry does need to involve them in what it is doing and explain what the benefits are. Do this well and water companies will not only reap the benefits of the innovation initiatives themselves, but water will be seen by customers as a truly innovative sector.