Cambio cognitivo

12.11.1 The review team‘s terms of reference preclude us from looking at the ban on disconnection. A number of respondents have raised the use of reduced flow valves (RFVs) commonly misnamed ‘trickle-valves‘. RFVs would reduce the flow of water to a household, supplying enough water for basic hygiene but posing a significant inconvenience and a strong deterrence to non-payment.

12.11.2 Responses were polarised for, and against, the introduction of these devices. Many respondents, particularly including water companies, supported the deterrence benefit of using such devices for non-payment of the water bill. Those same respondents conceded that installing either a PPM or RFV is expensive and so would be rarely used, but consider it still important as a deterrent. On the other side of the debate people were staunchly opposed to the introduction of either device, citing that they consider RFVs a form of disconnection and so banned under the Water Industry Act. UNISON, CCWater and Citizens Advice all opposed the use of these devices. UNISON said they would mount a legal

challenge if they were to be introduced. CCWater submitted evidence from their research88

to show that customers and money advisers would not welcome the reintroduction of either PPMs or RFVs. Respondents opposed to their introduction cautioned that as water companies have little current ability to know who their customers are, many customers genuinely struggling with affordability could be put at risk. The review team recognises both sides of the debate and concludes that, in today‘s society, other less draconian debt recovery methods should be employed.

12.11.3 Since the interim report was published, Water UK and the industry research organisation (UKWIR) have agreed to undertake a research project into the impacts of introducing RFVs on society. This research will commence in 2010. The Review believes that if disconnection is to remain in the system, the statutory change to a named customer becomes more crucial in tackling bad debt.

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Final Recommendations

12.12.1The review team recommends that:

• Water companies should be more proactive in preventing ‘at risk’ customers from falling into debt in the first place. DWP should consider the scope for widening the third-party deduction scheme to keep more customers on the scheme once a debt has been repaid. DWP should consult with companies on ways to improve the scheme and how companies can contribute to the costs of administering the scheme

• As a priority, the Water Industry Act 1991 should be amended to provide for a named customer and clarify who is responsible for paying the water bill; the ‘liable person’ should be the property owner unless they discharge their liability to the water company by providing tenancy information correctly and in a timely manner.

• The UK Government and Welsh Assembly Government consider whether companies should be legally able to pursue debt through the magistrates’ courts in the future.

• The review team believes that it would be beneficial to customers and companies if central and local government passed on information to the water companies on vulnerable customers on benefits.

• Ofwat should produce an annual report focusing on continuing issues in bad debt performance and affordability (see Chapter 11); this report should incorporate CCWater’s monitoring results and highlight transferable good practice where possible.

• Ofwat should consider removing bad debt as a notified item at the next price review.

• Ofwat should continue to approve social tariffs that encourage the payment of debt and therefore advantageous to all.

• The review team recommends that companies should publicise the help available to those in debt and ensure that bills are easily understood.

• There should be further exploration of the use of PPMs if there is a demand from customers for them as a budgetary tool.

Chapter 13 – Putting Customers First

Scope of this Chapter

13.0.1 This chapter looks at the role of companies, regulators, and consumer bodies in a regional monopoly water industry and discusses their relationship with water customers. It makes recommendations on improved customer engagement, how companies are incentivised to respond to customers better, and the provision of information to customers.

Context

13.1.1 Because water companies are regional monopolies, household customers have no choice about which company they use to supply their drinking water and sewage disposal service. Customers also have very little direct control over the key decisions that affect the size of their bill.

13.1.2 It is therefore vital that customers are given both adequate information and sufficient opportunity to engage with companies, the regulator and the UK Government and Welsh Assembly Government on matters affecting their service and the price they pay for receiving this service. A number of improvements should therefore be made:

• Customers must be consulted properly. They should be engaged more closely, especially in key decisions that directly affect their bills;

• Regulatory mechanisms must incentivise responsive customer engagement – the Overall Performance Assessment (OPA) and Service Incentive Mechanism (SIM) must really count, and customer experience really has to matter;

• The type and flow of information must ensure customers are as well informed as possible. Information empowers the customer.

13.1.3 The review team has looked at a number of facets of the relationship between the water industry and its consumers. Two-way sharing of information and active customer involvement are key to managing future demand and supply successfully. Transparency and accountability are vital if customers are to understand what and how much they are paying for and why. This will ensure that they have the opportunity to influence decisions in these areas.

13.1.4 Two points at which customers should be involved in spending decisions are the price review process, and before the UK Government and Welsh Assembly Government commit to EU or UK legislation on improvements to environmental quality for which the water customer might be asked to pay.