Posted: Mon 28th Nov 2016

Concerns Over Impact Of Severn Trent Takeover On Local Dee Valley Water Suppliers

Wrexham.com for people living in or visiting the wrexham area
This article is old - Published: Monday, Nov 28th, 2016

Concerns have been raised over the impact of a possible takeover by Severn Trent on Dee Valley Water’s local supply chain, with it claimed central procurement could put jobs at risk.

Wrexham.com has seen a list of local suppliers, numbering close to 100. We have plotted the location of around 80 on the above map.

Llyr Gruffydd, Plaid Cymru’s North Wales AM who met staff at Dee Valley last week (pictured below) said: “The Severn Trent takeover bid would mean current local suppliers – about 80 firms in the Wrexham area – losing out because Severn Trent operates a central procurement system.

“In some cases we know the impact of that would be severe with some companies reliant on Dee Valley contracts facing job losses. There’s a lot at stake for the local economy and that’s why we need a cross-party approach to ensure the right result for the workforce, local suppliers and customers.”

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We asked Severn Trent if the strength of feeling against their bid had been recognised, and if so why they were persisting with an attempt to take over Dee Valley Water.

We also asked if the 80+ local companies would be affected by any centralised procurement, and if there was any long term assurances for these local businesses, many of whom have been working with Dee Valley for many years.

Due to the rules surrounding takeovers by PLCs on other PLCs details are restricted to very formal disclosure statements via the regulatory news services.

In reply to the above, a spokesperson pointed us to elements of the already published releases:

We believe that an acquisition of Dee Valley by Severn Trent Water would add value for customers, bring investment and help support and develop skills.

We believe we can provide value for customers by:

  • Extending support for vulnerable customers, where we will provide discounts and support for those who most need it – potentially up to 90% off water bills;
  • We intend to launch 24/7 customer support so people can contact us at any time of the night or day, through a range of channels, including web chat, social media, telephone and email;
  • Extending our digital philosophy by equipping and training frontline teams so they can use new technology to help improve operational response times for customers;
  • And we will maintain low bills. Dee Valley currently has the lowest average water bills in the industry, and Severn Trent has the lowest average combined bills. In addition, we have committed to sharing half of any wholesale cost efficiencies achieved with customers, which will be reflected in future bills.

“We intend to fully support continued investment in infrastructure in the Dee Valley region applying its best practice, economies of scale and procurement expertise in order to deliver best value for customers. For example, Severn Trent is investing around £3bn in its region between 2015 and 2020.

“And finally, we attach great importance to the skills, operational experience and technical expertise of the existing employees of Dee Valley and intend to maintain front line field force operations which comprise a majority of Dee Valley’s employees at their current locations in Wrexham and Chester. We therefore very much want to maintain a local presence. We’re also looking to bring our graduate programme and award-winning apprentice schemes.

On Friday Jo Stevens MP, Shadow Secretary of State for Wales, joined local MPs Ian Lucas and Susan Elan Jones visiting Dee Valley Water and met with staff, managers and union representatives.

Commenting on the visit, Jo Stevens said: “Dee Valley Water is a great local company, with a strong brand and excellent record of customer service. Ofwat has recognised the company’s superior service levels. Severn Trent’s aggressive takeover bid, to gain a foothold in Wales, would damage this ethos irreparably.

“Severn Trent make no guarantees that the Dee Valley workforce will keep their jobs. There is also a large number of other small businesses in the supply chain which would be very badly affected.”

“The competition and markets authority needs to take a serious look at the bid, which is not a positive but a destructive proposal.”

Ian Lucas MP commented: “The competing bid from Ancala offers guarantees of Dee Valley’s operations and brand being retained. There is clear indication from staff, and people in the area, that Severn Trent’s bid is not wanted. If a takeover is to go ahead, the community strongly favours Ancala. I’ll be standing up for my constituents – both staff and customers of Dee Valley – and supporting Ancala’s bid.”

Susan Elan Jones MP added: “I will be working with customers and community members, and raising this issue in Parliament. It is not fair or right that a big company can so quickly cause this level of uncertainty by targeting a local, growing business. My first concern is for the workforce and I will do everything I can to make sure that jobs are not affected here.”



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