Water consumer engagement and accountability
The climate in the water industry is changing. People’s awareness of the industry has increased through extensive media coverage of poor operational performance, rising bills and other failings which has seen trust in the sector fall to an all-time low. This has led to calls for greater scrutiny of the industry and the introduction of the Water (Special Measures) Act.
It is now more vital than ever that water companies engage very effectively with consumers to understand their needs and experiences of everyday services, their priorities for future services, and to show people that their views matter and count.
Against this background, CCW and Ofwat jointly commissioned Blue Marble to look at how customers would expect companies to engage with them and how they want to better hold companies to account.
This report sets out the results of that research in two parts.
The full methodology can be found in the appendices (pdf)
Summary of key findings – what people told us
Part 1 – Engagement
Since CCW’s previous research (in 2020), there is a heightened need for companies to demonstrate honesty and transparency in their research and engagement. Where consumers might have been minded to trust companies to do the right thing for people, now they want their participation in research to have meaning and impact.
Consumers see the benefits of giving views and taking part in research to influence change in the water sector and to inform any company activities that could affect customer bills. Most are willing to participate when they can see evidence that their opinions can help make a difference in driving better outcomes for the public.
Consumers prioritise participating in decisions they see as having a direct impact on their pocket – bills, investment and affordability of new plans; as well as anything affecting what they see as the core service – treating and delivering clean water.
It is important to use different ways to participate to make research accessible to a diverse range of people.
Consumers need to be motivated to participate in research. For most a financial incentive is key and reflects the transactional exchange they expect of providing their time for money, but the idea of participating in something important can also be a strong motivating factor. This has implications for the way the research is described, the quality of the respondent experience, and the belief that it will lead to change or action.
Increased company communications (to participants and the wider consumer base), would help consumers feel that their views have been acted on. Consumers particularly want to see this when research leads to consensus between consumers about what needs to change, or when things go wrong (like incidents and underperformance). Companies can consider more closely linking research and insights work with communication activities.
These findings led to the development of five principles that should underpin meaningful engagement:
Consumers say water industry research and engagement should be…
- Demonstrate honesty and transparency by communicating and engaging proactively when things go wrong.
- Use engagement to show integrity and trustworthiness in action.
- Help people have an informed say, with clear and concise information.
- Provide tailored and localised information on everyday services.
- Provide sufficient information without overwhelming people, particularly on business planning topics.
- Offer multiple options to participate and simple ways to give views.
- Everyday services engagement should involve more frequent, region-specific approaches and include consumers directly affected by issues.
- All research, but especially business planning, should allow people to choose the level of information they engage with.
- Provide financial incentives.
- Design research and engagement to be time efficient, engaging, and considerate of people’s busy lives.
- Communicate the benefits and impacts of taking part clearly.
- Engage consumers on topics that feel most relevant to bills and public concerns.
This research provides valuable insight into how this can be achieved and will help shape the way consumers should be engaged on day-to-day issues, as well as business plans for future price reviews. The findings will also help shape future CCW campaigns, ensuring we are responding to the issues that matter most to consumers in England and Wales. We expect companies to consider the findings when they are developing their plans for engaging and communicating with customers as part of the industry’s journey to improving people’s trust.
Part 2 – Accountability
In the context of declining trust, perceived poor performance and rising bills, consumers are willing to intervene directly to hold water companies to account. They see a role for the public to effect change in the water sector monopoly system by taking part in a new approach to accountability.
Consumers recognise a power imbalance with water companies and believe that a new consumer accountability mechanism is important because companies are not seen as being motivated to prioritise customers as monopoly providers.
Consumers want to hold companies to account where they perform poorly and have the greatest direct impact on the public or environment. They focused on ‘big issues’, feeling strongly about topics where companies are perceived to be cutting corners or misleading the public; including supply incidents, water quality, and storm overflows. They are interested in how income from bills is being used.
Consumers want a mechanism for holding companies to account that is independent, made up of a wide range of consumers, and sufficiently empowered. Most support the idea of a ‘consumer group’ in principle as a collective way to ‘give them a voice’ and direct involvement in accountability. Group members should act on consumers’ behalf using customer insight and their own experience. Suggested necessary powers included: requiring senior staff to attend, provide information and answer questions; evaluating proposed solutions.
Consumers want the evidence of the outcomes of accountability disseminated directly to all consumers. Desired outcomes include; transparency from companies about their performance, including financial matters, acknowledgement that the public see current performance as not good enough, evidence any group is being listened to, progress updates (verified by trusted third parties), and punitive measures to encourage companies to act. Non-households want a higher profile for the retail market and compensation for lost business during incidents
The findings led to the development of five principles that customers consider must underpin any process for holding companies to account.
Principles for consumers holding water companies to account:
- Companies demonstrably taking responsibility for poor performance.
- Being transparent through communications and senior staff engagement.
- Groups that have powers to set the agenda and review plans, with wider consumer consultation too.
- Power to reject proposals and recommend sanctions are triggered (that affect senior company employees or shareholders, not consumers and services) where companies have not acted.
- Setting standards and metrics that can be tracked and verified and easily understood.
- Using timeframes to ensure progress.
- Clear, accurate information to enable consumers to make meaningful assessments.
- Supported by expert voices and a liaison role to facilitate the company and group interactions.
- Groups that represent all parts of the population, through inclusion or representation.
- Involving people who bring relevant experience, skills and attitudes to draw on.
These findings will inform CCW’s work to help deliver the UK Government’s plans to give consumers a greater voice in holding companies to account, which we are doing through the development of Consumer Panels.
We expect that companies will take on board this research when considering their own mechanisms for independent challenge going forward and in helping to address the declining levels of trust people currently have in the water sector.