Principles & Approach

Transparency

Transparency

One of the key pieces of feedback we’ve had from customers so far is that we should be more explicit about our approach to transparency and how we will achieve deeper levels of transparency during the BP24 process.

Our amended Principles and Approach (P&A) document takes this, and other feedback that is applicable at this stage, into consideration. It now explicitly says how we will weave the golden thread of transparency through each of the four principles. Transparency is not only as important as the four principles, but critical to each.

You will also find responses to the questions we’ve been asked during the P&A consultation stage here in the hub.

Engagement

Our plan will be built on engagement

We will be proactive about engagement, facilitate a range of easy feedback options and respond to all feedback appropriately.

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To support transparency, we will share all of the questions our customers and stakeholders have asked us during the BP24 process, along with our responses to those questions. We will do this via our Business Plan Hub.

We will not treat silence as success

We will make a proactive and determined effort to give every Xoserve customer a chance to have their voice heard during the BP24 process. We will also share all non-confidential customer feedback we receive. We’ll do this in formats that cater for varying levels of interest; both through detailed or summarised written communications and verbally during our schedule of customer engagement events.

We will explain what action we have taken in response to feedback

Throughout the BP24 process, we will respond to all customer feedback in a clear and timely manner. Your requests, suggestions and recommendations will be tracked through the process, with outcomes communicated directly to you by email and via our dedicated online platform.

We will draw on your past feedback

The feedback we received during the BP23 process was extremely valuable and has not been forgotten. When creating this year’s Business Plan, we will be sure to include information you have already told us is valuable to you, such as forecasts of the charge rebate for Y-2 and Y-1, and current performance figures, including Data Services Contract (DSC) Key Performance Metrics and Indicators (KPM/KPIs).

Assumptions

  • Customers will make time to engage with the business planning process, as they have in previous years.
  • Engagement opportunities for BP24 should build on rather than replace what was offered for BP23.
  • Customers value dedicated Business Plan sessions.
Principles

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Questions

Our plan will be accessible

We will ensure that information is clear and concise, and that it is accessible to all customers and stakeholders equally.

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To support transparency, we will aim to communicate in a clear way at all times and present relevant information to help customers to understand BP24.

Fewer words, more meaning

We’ll provide all of the relevant facts you need but won’t repeat ourselves unnecessarily. We will annex information the majority of our customers already know, while making sure those less familiar with our business can still access it.

Get straight to what you need

We’ll ensure our BP24 documents are easy to navigate, so that whether you’re having an initial read through, want to get straight to key information, or are using the documents

for reference, everything is well signposted and can be quickly located. We’ll also make sure online information complies with accessibility guidelines and is provided in a printable format.

Cost visibility

We want to provide you with more visibility of our day-to-day operational costs, while protecting confidential information relating to our commercial arrangements. We will share a view of Xoserve’s current and forecasted headcount and a breakdown of our direct costs. We will align terms and language used with the DSC service documents.

Assumptions

  • The majority of Xoserve customers understand the historical evolution of our business.
  • Customers value brevity and clarity, and want us to focus on key information.
  • Customers use the Business Plan in different ways and at different times, and want the document to be a reference point.
Principles

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Questions

Our plan will articulate value for money (VfM)

We will provide a clear framework for VfM and explain how each aspect of our plan delivers against this framework.

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To support transparency, we will undertake an Efficiency Review of our services using an independent third-party. We will share the findings of that review with our customers.

We will aim to articulate value for money in the following ways:

Providing a clear framework to express VfM

VfM will be a central theme running through BP24. We already know that our baseline Service and Operate (S&O) costs are reducing in line with our forecasts. (See graph) But delivering VfM isn’t about simply making something as inexpensive as possible, which can often turn out to be a false economy. To articulate VfM clearly and comprehensively, we will use a framework that goes beyond considering the economy of our services, to also consider efficiency, effectiveness and equity. By balancing the ‘four Es’ we believe it is possible to deliver real and lasting VfM for the CDSP services. The framework will be applied across all costs.

Undertaking an Efficiency Review

As a part of our effort to ensure VfM, we will undertake an Efficiency Review. This benchmarking exercise will be conducted by an independent third party, based on a specification agreed with customer representatives. We will support the review through to conclusion, with the aim of making the process as straightforward and speedy as possible. We will respond to all output received, aiming to do this within the BP24 cycle.

Review of Cost Allocation Methodology (CAM)

We will lead a comprehensive CAM review. This will ensure that costs are being equitably shared by customer constituencies. The CAM will be reviewed with our customers via the Contract Management Committee (CoMC). This will build on their valued current involvement in monitoring and reviewing DSC performance.

Assumptions

  • Xoserve customers will understand the balance of elements within the VfM framework and know that VfM is about more than making services inexpensive.
  • The 4E model will provide customers with a clear framework for articulating VfM.
  • Customers understand that they will be consulted about any proposed changes to cost allocation.
Principles

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Questions

Our plan will consider uncertainty

We will be clear about what we don’t yet know, and how different future scenarios will affect our investment plans.

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To support transparency, we will always be open about what we know and what we don’t, at the time the investment is sought. We will provide information about the assessments we have made in relation to proposed investments. We will endeavour to include all relevant information within business cases, so that customers can feel confident that they are fully informed before providing feedback. We will be open about investment risk, where that risk lies and how we intend to insulate our customers from it.

We will endeavour to consider uncertainty in the Following ways:

We will describe the future scenarios that BP24 must be resilient to

Significant uncertainties will affect the creation of BP24 and we are considering the following areas within our Business Planning process:

  • the evolving role of hydrogen across the energy mix
  • the reducing role of natural gas as a source of energy across both I&C and domestic consumers
  • the changing energy mix, now potentially incorporating hydrogen & CCUS (carbon capture utilisation & storage) as well as our current mix of Biomethane, Methane and Electricity
  • changes that extend beyond the gas market but will affect our stakeholders, including energy market consolidation and large-scale process changes such as half-hourly billing

We will assess whether the uncertainties we all face are immediate or long-term concerns, and explain how we plan to adapt to the changes and support our customers.

We will be clear about risk

There will inevitably be a level of risk associated with the investments outlined in BP24. We will endeavour to be clear about where this risk lies, what we are doing to minimise it, and what portion of it is carried by Xoserve, our suppliers, and customers.

We will remain accountable

We will always act in a way that we believe furthers the best interest of our customers and consumers. We will aim to make BP24 acceptable to as many of our stakeholders as possible, while recognising our Board’s duties and acknowledging that the responsibility for securing the best possible outcomes remains with us.

Assumptions

  • As in previous Business Plans, we propose only to include projects that we believe are essential to the delivery of CDSP services.
Principles

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Questions