Dame Yve Buckland, chair of the Consumer Council for Water (CCWater), is accustomed to working in the shadow of the axe. There has been a question mark hanging over the organisation’s future for as long as she can remember and she has had to park any worry about that in order to get on with the day job. She says: “It’s been a principal objective of the board to get everyone who works in the organisation to put that to one side and focus on what we deliver for customers.”
That’s a tough sell, and it is to CCWater’s credit that staff have been doing a sterling job despite the ongoing uncertainty. Nevertheless, Dame Yve admits she can’t help but be affected by the ups and downs. The high point of her eight years as national chair was: “The day the Gray report was published. It was the most far-reaching, independent review there had been of the industry and of the way consumers were represented. Although CCWater isn’t complacent and although Gray pointed out things we could do, fundamentally he endorsed what we were doing… So I remember that day running round with my hands in the air!”
The low? “I have little low points periodically when there’s another review or another set of issues we have to face up to.”
Possibly another one of those low points is looming. In April, as part of broader consumer landscape reforms, Consumer Focus will morph into a new organisation – with the temporary moniker the Regulated Industries Unit (RIU) – to represent consumer interests in regulated industries. The idea is that the RIU will have detailed, policy-level understanding of complex regulated markets where there are common issues such as debt, vulnerability and billing.
Consumer Focus’s duties representing customers in non-regulated sectors will pass to the Citizens Advice service (CAB). The RIU will follow suit in April 2014 when it too is transferred (for the most part) to the CAB stable.
For now, CCWater is unaffected. The RIU will be initially covering energy and post (in England, Scotland and Wales); post-only in Northern Ireland; plus water in Scotland. But given that the government has committed to retain CCWater only until 2014, the question is whether the job of representing English water customers will also pass to the RIU after the next price review.
Dame Yve tactfully says the jury’s out on whether or not that would be a good idea. “CCWater is certainly here until the price review – and just beyond the price review if you look at what ministers and the Efra committee are saying . I would hope that gives us the chance to see what the RIU can deliver, how it’s delivering, and what value it can add. Certainly I think any person in the street would think it pointless merging something if you’re not going to add value.”
It is a point she hammers home. “We really need to be careful not to lose what CCWater does deliver – and the RIU is high level. We’ve returned £15 million to customers as a result of complaints; £150 million of money back in the last price review by making companies share the benefits of outperformance; and had real influence on policy… The RIU must add value, build on all of that and deliver more than we deliver, greater satisfaction. I think it’s going to be particularly hard.”
Hard indeed. CCWater is widely and highly praised for its work – by the likes of Gray, the Efra committee, the Federation of Small Businesses and water minister Richard Benyon. Dame Yve smiles: “Our colleagues in Which? actually said CCWater would be a better graft for the RIU than what’s there at the moment, simply because of our technical expertise both on the ground and at national level. I was rather amused by that!”
Moreover, CCWater has been very successful working with the industry to consistently drive customer service up and complaints down. And the sector comes out well in a Consumer Focus report from October 2012 comparing complaint handling in energy, water, telecoms, financial and legal services and Royal Mail.
So the RIU will have its work cut out to outperform CCWater, particularly because the former lacks some of the latter’s crucial positives. There is a great clarity about CCWater – it looks after all water consumer issues, from advocacy to redress and complaints handling. The new unit is more messy in that it covers bits of markets in bits of geographies, contributing to an already confusing consumer landscape.
Moreover, the RIU has no grass roots component: it won’t handle complaints, so won’t hear first hand what’s bothering customers. Dame Yve says: “I certainly think that’s one of the great advantages with CCWater – you can link policy with the reality of where service gets delivered.” Plus energy has a cautionary tale: “I think the customer voice in energy has been lost. It’s dissipated and fragmented; we have more politicians engaging on those issues and a variety of different organisations.”
Dame Yve identifies a number of other concerns should the RIU take on English water. How well would business customers be represented by the CAB? How would it work with Wales excluded (the Welsh Government is adamant it will retain CCWater)? Would it have the technical expertise to cope with the fundamental reforms in the making? The Efra committee doesn’t seem too confident.
Then there’s the question of what would happen to water complaint-handling should CCWater be subsumed into the RIU. Dame Yve says: “The only sensible approach if CCWater were to be merged would be to take what it is and plant it into the new body. Gray said you can’t separate out the two functions… If you try to break that link, if you try to take complaints and graft them on to the CAB, I think they’d just go under.” She praises the CAB for its work in the community, particularly among the disadvantaged, but notes: “My colleagues in the CAB at local level tell me they don’t know how those consumer hubs would pick up the 14,000 enquiries a year that we handle. So again there’s a question mark.”
On complaints, she says the issue of the moment is whether an ombudsman-style approach should be used in water and whether redress schemes could offer more. Ofwat is looking at it. Dame Yve is open to learning from other schemes but argues that any change must improve what CCWater already does. “You wouldn’t want to just move to an ombudsman scheme. CCWater worked with the companies on coming up with a much more flexible, much more customer focused approach than the rather narrow ombudsman scheme in which a particular group of customers might get something out of the scheme if they technically fit the criteria. And then it’s usually capped.”
Elsewhere she would like to see the service incentive mechanism (Sim) beefed up with stiffer penalties and bigger rewards to incentivise good service and drive complaints down further. “The Sim has made a real difference. It’s brought customer complaints up to a level of board engagement and board recognition. Continuing to promote that will be important.”
Dame Yve says CCWater will work constructively with the RIU in the year ahead but its priority will be getting on with the day job. “The most important thing for us in CCWater at the present time is the price review… This is the price review to deliver back to customers. If there was ever a price review when customers needed to get a return, this is it.” She is reluctant to pluck a figure out of thin air but says “we are all thinking real terms flat has got to be a benchmark” for prices in 2015-20.
CCWater is heavily involved in the customer challenge groups set up to put customers at the heart of the next determination. Dame Yve herself chairs the Anglian, Severn Trent, South Staffs and Cambridge groups and has played a role in the Essex and Suffolk group. Utility Week will be looking in detail at these groups in another article in this Water Customer Representation series.
The customer challenge groups are also looking at social tariffs. CCWater is dissatisfied with the social tariff as a mechanism to deal with water poverty and willingness to pay is limited to “£1 or £2, targeted at people in the greatest need”. Dame Yve says: “It has to be something the companies come to the plate about – their own trust funds, for example.”
Hopefully the RIU will perform well for energy, post and Scottish water customers. But should the axe fall on CCWater come 2014 or 2017, it is hard to see how English water customers’ best interests will be served.
This article first appeared in Utility Week’s print edition of 15th February 2013.
Get Utility Week’s expert news and comment – unique and indispensible – direct to your desk. Sign up for a trial subscription here: http://bit.ly/zzxQxx