UKWIR
BEST VALUE FRAMEWORK
CLIENT
REQUIREMENT
UK Water Industry Research (UKWIR) needed a single unified framework for Best Value Planning of the Water Investment Plan that water companies submit to regulators.
CHALLENGE
Developing a pragmatic yet rigorous and defensible framework to help water companies think through complex multidimensional water resource management plans, characterised by an uncertain future and difficult trade-offs.
SOLUTION
A comprehensive framework that uses Decision Lab’s approach to MCDA and considers technical, economic, environmental and legal perspectives. It provides clear practical guidance for the development of Best Value Plans.
Helping the water companies to get out of deep water
There is a new requirement for a Best Value Plan (BVP) to be included in water companies’ regulatory Water Resource Management Plans (WRMPs) submissions. However, there are no consistent guidelines for this task. This has thwarted efforts from water companies to produce their WRMPs and in some instances caused problems with the acceptance of plans by stakeholders.
We joined a team led by HR Wallingford, leading experts in the water sector, to create a unified framework for developing BVPs. The diverse team of specialists included economists, planning and environmental professionals, and experts in law. Decision Lab’s technical specialism lies in objective methods to support complex decision making as well as water investment modelling.
Complex interactions
It is a significant challenge to develop an approach that will be used as one unified decision-making instrument. Water resourcing is particularly challenging, as it is characterised by several available courses of action in a changing and uncertain environment, complex interactions between different stakeholders and sectors with often conflicting perspectives on numerous both quantifiable and intangible objectives.
The framework must be flexible enough to be practical for different types of contexts faced by water companies, and careful explanations are needed for its widespread acceptance and adoption.
One valuable tool to help drive many best value plans
The team’s diverse skillset allowed us to consider technical, economic, environmental and legal perspectives, providing clear practical guidance for the various stakeholder groups. Decision Lab’s key contribution was the development of the methodology core: a five-step framework centred on Multi-Criteria Decision Analysis (MCDA). Our MCDA approach is grounded in best practice decision science theory, including cognitive psychology, facilitation and negotiation. This value-based approach ensures all relevant criteria are considered, enabling the quantification of stakeholders’ value judgements combined with performance measurements. It fosters a shared understanding of a decision problem and highlights areas of important disagreement which in turn enriches discussions. Importantly, it forms a transparent link between judgements and decisions on courses of actions selected. To ensure acceptance and adoption of the framework, we worked closely with regional groups, water companies and regulators to refine the steps.
Beyond water: best value for all utilities
The developed approach has been published and is available from the UKWIR website (https://ukwir.org/deriving-a-best-value-water-resources-management-plan). It is being used by water companies as guidance to produce their Best Value Plans and is included in the Environment Agency’s recommendations for programme appraisal and comparison. The developed framework sets a precedent for the other markets and sectors that can benefit from a clear guide that helps to develop the Best Value Plan. We feel proud to be supporting the Canal & River Trust in its transformation to a Wellbeing trust.
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