But just what is the real view about energy and water companies among the general public?
Are utilities really seen as the villains of the piece, as some would have them portrayed? Is there still trust and confidence that utilities are providing a good level of service for customers in difficult and challenging times? Or perhaps instead the truth lies somewhere in between?
Getting public opinion on board would be key to the success of any social contract between consumers and utility companies, as outlined in our New Deal for Utilities campaign. So understanding what the public currently thinks is vital.
Knowing their thoughts on the providers of essential services; their satisfaction levels with water, electricity and gas suppliers, and electricity networks; whether they consider them value for money; if they think the criticisms are fair or unjustified; whether they genuinely trust utilities or not; and understanding the key factors defining those trust levels, has never been more relevant.
And significantly, while only a few years ago nationalisation was not even on the public’s radar, now it is a very real commitment from the Labour party.
Nationalisation is the new bogeyman for utilities, and one expected to gain ground in the coming year. But just what do the public think about the prospect of ownership and management of utilities being placed with the government? And would they be minded to vote for such a policy? What do they think the benefits could be, and the concerns? Is there enough competition among suppliers, and which utility service do they think should be nationalised first?
To launch the debate around what a new deal for utilities might look like in order to help build public trust, and to set the scene for a series of articles that will help drive our campaign, Utility Week decided to first get the answers to these burning questions by commissioning an exclusive poll.
We wanted to take the temperature of the public mood around energy and water companies, and the findings of the survey by Harris Interactive provide a fascinating snapshot. Read on to find out more about the real state we’re in.
What the public thinks
The fairly good news is that over half of respondents were satisfied with the service they received from utilities, with satisfaction highest for water suppliers at 66 per cent, of which 22 per cent were very satisfied (note: all figures in the survey are rounded up).
However, utilities will recognise there is clearly no room for complacency, as this still leaves nearly half of customers who didn’t express a clear, positive verdict.
For all suppliers, a large proportion of people surveyed – ranging from 25 per cent to 36 per cent – were neutral. Meanwhile, those recording dissatisfied or very dissatisfied ranged from 7 per cent to 10 per cent. The highest dissatisfied/very dissatisfied rating went to electricity suppliers.
At just 17 and 15 per cent respectively, gas suppliers and gas networks scored the lowest for customers being very satisfied, however gas networks, along with electricity networks, recorded the lowest dissatisfied customers (at 4 per cent) and very dissatisfied customers (at 3 per cent) among all suppliers (see Consumer Satisfaction graph).
Value for money
On value, percentage scores in favour of utilities came out lower, with neutral customers again forming a sizeable proportion (between 33 and 41 per cent) and those disagreeing ranging from 19 per cent (for water) to 24 per cent (for electricity).
Almost half of respondents – 47 per cent – said they were likely to feel their water supplier offered value-for-money services, followed by their electricity supplier at 43 per cent and electricity network at 42 per cent. The lowest scorers were gas networks at 38 per cent, with gas suppliers coming close at 39 per cent (see Value for Money graph).
In terms of public profile, 4 in 10 of those polled were undecided as to whether utility companies came in for unfair criticism. Over one-fifth felt that they did, with just under 4 in 10 finding the criticism aimed at utility companies to be fair.
Trust
On the key issue of trust, almost half of respondents (48 per cent) were likely to view their water supplier as trustworthy – a finding that may go at least some way to challenging political criticism of water companies. However, that still left 35 per cent of respondents neutral on whether they could be trusted, another 11 per cent disagreeing and 5 per cent who strongly disagreed.
Trust for the other sectors were not too far behind. Interestingly, in light of the price cap, electricity suppliers came in next – 44 per cent of those surveyed agreeing or strongly agreeing that they were trustworthy.
Least trusted were gas suppliers, with 40 per cent of respondents agreeing they were trustworthy. Neutrals, however, also added up to 40 per cent. Meanwhile 14 per cent of people disagreed and 7 per cent strongly disagreed they could be trusted.
The key factor that undermined trust, according to the survey findings, was rising prices (at 66 per cent). However excessive profit, a long-running public perception issue, ranked next at 49 per cent, followed by executive pay being too high (at 41 per cent). Poor service came in second-lowest, at 28 per cent (see Trust in Utilities graph).
An ongoing theme among utilities has been competition within the energy sector – the source of many media headlines, and now government legislation in the shape of the price cap. So too has been the drive towards decarbonisation and renewables.
The section of our survey that looked at energy awareness found that despite recent intervention and a huge increase in the number of suppliers in the market, just over one-quarter of respondents (27 per cent) felt there were enough mechanisms in place to ensure that electricity supply was competitive – although the majority, (46 per cent), polled no.
Meanwhile, over half (54 per cent) would not be prepared to pay more for their electricity to speed up the move to renewables. The same proportion were also unaware that a portion of their electricity bill goes towards the decarbonisation of supply.
Nationalisation
The emergence of the nationalisation debate has rocked utilities. From being a fringe idea, it has moved centre stage to become a Labour commitment and increasingly, quite feasibly, a potential future policy – something we will be exploring later in our campaign.
In our survey, just under one-third of respondents (32 per cent) said they felt the ownership and management of utility companies should rest with national government, although almost one-quarter (23 per cent) were unsure as to who would be best placed to run these services.
A total 14 per cent of those questioned thought utility companies should be owned and managed by private companies – exactly the same number as those who thought it was a job for local government (the age profile of these respondents being between 18 and 24). Only slightly more (16 per cent) advocated private/public partnership arrangements (see Utilities Ownership graph).
Nationalisation policy could wield some influence on voting behaviour, the survey found, with 34 per cent of respondents revealing it would make them more likely to vote Labour. Eleven per cent (predominantly those aged over 55) said it would make them less likely to vote for the opposition party. A total 55 per cent of those surveyed said it would have no impact on their vote.
A key message for utilities, however, was that precisely half of respondents felt the greatest benefit of nationalisation would be cheaper services, with around one-third believing it could bring better service overall.
Other findings revealed that 28 per cent thought it could create greater investment to tackle issues and problems, with 23 per cent believing it would speed up efforts to tackle climate change through the decarbonisation of networks. Over one-quarter (28 per cent) of those who responded however felt there was no benefit to the policy (See Nationalisation Benefits graph).
The biggest concern about nationalisation of utilities among those we polled was the likely cost and affordability (at 34 per cent) of such a policy. But respondents were split on this, with practically the same number (32 per cent) unconcerned.
Twenty-five per cent feared it would result in poorer service, with the same number believing it could lead to less investment in services. Nineteen per cent thought it would slow down efforts to tackle issues and problems, with 14 per cent feeling it might impact efforts to address climate change through decarbonisation of the networks.
In terms of renationalisation preferences, over one-quarter (27 per cent) would prefer to see energy distributors renationalised first. Twenty-three per cent wanted to see national, publicly-owned energy companies set up, followed by 20 per cent who would prefer water and wastewater providers selected initially. The largest number of respondents, however, at 29 per cent, remained unsure about what part of the industry should be renationalised first.
Harris Interactive analysis
This research demonstrates, contrary to what many might believe, that the majority of consumers are not greatly dissatisfied or do not greatly mistrust their utility suppliers, suggesting that the service they currently receive is reasonably good.
It is also clear from the research that, despite supplier efforts to persuade their customers otherwise, price remains king.
• First, it is intrinsically linked to trust, with rising prices cited as the number one reason for undermining trust.
• Second, the number one benefit of nationalising utilities, selected by half of consumers, is cheaper services and the major concern of nationalisation is “it costs too much and we can’t afford it,” albeit that this was only selected by a third of consumers.
• Third, and interestingly in the context of the push towards renewables, over half of consumers are not prepared to pay more for their electricity to speed up the transition.
Energy suppliers in particular have done a lot of work to communicate to customers and wider consumers what exactly makes up their final bill but this message has not cut through. Further education is needed and perhaps it is time for government and regulators to re-double their efforts so that people are more aware of this.
Nationalisation will almost certainly be on the agenda at the next general election and a huge education programme will be required here too on the pros and cons, so that consumers can have a fully informed view.
Mark Brenton, head of energy research, Harris Interactive