Last October, sewerage companies became responsible for maintaining private sewers in a move that affected most properties in England and Wales. It also effectively doubled the sewerage networks of some companies. The onus was on companies to inform customers of this transfer of responsibilities and what it meant to them in terms of both the change in liability and the potential for increases in bills.
Companies approached this in different ways, and the Consumer Council for Water (CCWater) was keen to find out what customers made of the information they received. Did they understand it? Were they concerned about it? And did they recognise that this had implications for bills?
The research also sought customers’ views on how the companies could implement maintenance and repair programmes and, crucially, at what pace costs should be reflected in bills. At a time when customers are feeling the pinch, the results make interesting, and sometimes unexpected, reading.
Just under half of domestic customers and a quarter of business customers were able to confirm that they had received and read the information sent out by the company. But one business customer commented: “There is zero chance I received this letter. All mail comes through me and I would have clocked this as important.”
Qualitative evidence suggests that lack of recollection may be down to many customers failing to appreciate the significance of the contents of the letter or failing to differentiate it from other non-requested “marketing” received through the door. “I wouldn’t have opened it if it was just addressed to the occupier, I would have chucked it away straight away,” one respondent said.
More than 80 per cent of domestic customers and business customers who had read the notice considered it to be fairly or very clear. Despite some negative feedback, CCWater has taken relatively few calls from customers who felt uninformed or concerned.
Only around one in six found it to be unclear. One such commented: “Fortunately we’ve not had any problems … I assume we are responsible for our own property but I’ve really no idea.” The customers least likely to be aware of the key messages are those in lower socio-economic groups, typically residing in flats and having no, or limited, access to the internet.
Six out of seven customers thought companies should do more to get the key messages across to customers, with most suggesting that information should be included with bills and prominently displayed on company websites. It was also highlighted that none of the companies emphasised the good news aspect of the transfer. One respondent said: “What strikes me as odd is that none of them actually say the good news, that is: if you have a problem, it won’t cost you any money.”
These findings raise some questions about the style of the companies’ communications. Some six to eight weeks after transfer, most customers could not recollect key details. Moreover, many customers were critical of the leaflets or letters they received from companies, partly because they were too formal, partly because they were addressed to the occupier (and therefore were deemed junk mail), and partly because they did not appear
to relate to the property type in which the customer lived.
Customers had mixed views regarding how quickly water companies should repair non-urgent blockages in the newly transferred sewer network. Half of domestic customers want sub-standard sewers to be repaired as soon as possible, but more than one-third would rather these more costly repairs were deferred for a couple of years, leading to more gradual sewer replacement and smaller bill increases. For business customers, the split between these two preferences was fairly even.
In terms of the timing of bill increases, two-thirds of domestic customers would prefer bill increases to be introduced sooner rather than later to avoid potentially steeper increases in later years. Business customers’ preferences were more mixed, with around half preferring gradual bill increases with price rises from April 2013 (particularly the smaller, micro-enterprises). But a substantial minority, especially larger businesses, would prefer water companies to delay price increases until 2015 or beyond.
So why do customers overall support water companies bringing forward some of the repair work, even though this will mean prices go up sooner, rather than waiting and incorporating the costs of sewer transfer into charges from 2015? CCWater has seen strong opposition to spikes in bills in previous research, and a preference for paced increases. Income levels for many customers are, at best, static and this tends to favour a steady approach to managing household finances.
Customers’ views may, however, not be realised. Ofwat has already signalled that companies will need to provide robust evidence of costs, and to support projections if they want price limits to rise before 2014. While incurred costs are known, future costs are, in Donald Rumsfeld’s words, “an unknown unknown”. That may prove to be a killer blow to any prospect of an interim determination of price limits.
The research presents some varied views. However, some points on improving communication are clear, and CCWater will be pushing all companies to view their interactions about the transfer – its benefits, its costs – as a continuous exercise, not as a one-off to fulfil a legal obligation. We have begun to discuss with companies how they plan to engage with consumers during the price review and will be following the process very closely.
Deryck Hall, head of policy and research, Consumer Council for Water.
Research will be published on the Consumer Council for Water website today (3 February). CCWater commissioned MVA to research domestic and business customers’ views starting in October with a qualitative study, to obtain insight into customers’ attitudes to the transfer and understanding of its complexities. The research then progressed to a survey of 1,748 domestic and 150 business customers.