UK based
Ensuring that every household has a ready supply of clean drinking water, that reservoirs remain at optimal levels despite our changing climate, and that our waterways are safe and unpolluted are just some of the responsibilities of water services.
Every single person relies on water services on a daily basis, so involving the public in decisions about those services is essential. Ensuring this customer engagement is done well, however, is not without challenges.
The challenge of engaging the public in water services
Engaging consumers and the wider public in water services can present many difficulties. Unlike other utilities, customers in the UK (and in many other countries around the world) do not choose their water service. Instead, their service is dictated primarily by geography.
Supplying water to households and maintaining waterways and reservoirs is not something most people would even consider to be a consumer product, but rather a simple infrastructural necessity. Water provision is therefore something that most citizens only think about when something has gone very wrong.
Unfortunately, there has been no short supply of water related scandals in the UK in recent years. Water companies across the country have routinely been ordered to pay large fines due to failures to address issues such as wastewater and sewage. Meanwhile, headlines about senior executives receiving large bonuses despite these ongoing failures have shocked and angered the public. These incidents have emphasised the need for water companies to demonstrate that they are listening to consumers, and taking their concerns into account.
With campaigns around water quality becoming commonplace across the whole political spectrum, there is increasing public scrutiny on water services. This scrutiny makes effective engagement with the public not only a legal requirement, but also vitally important to maintaining a viable service.
Trust and accountability
Water services in the UK are what are sometimes referred to as a natural monopoly. That means the nature of the industry makes it almost impossible for a competing provider to enter the market in any given area. Where natural monopolies are not state-run, it is essential that they demonstrate accountability.
Otherwise, it reinforces the idea that they are a service you can effect neither through consumer choice nor electorally. The emphasis is on the companies themselves to maintain the highest standards of integrity, in order to build public trust in their ability to run the service.
Engaging consumers in a structured and transparent way can improve understanding, build legitimacy and reduce conflict. By giving customers an opportunity to express their views in a way that can have a real impact on decision-making, water companies can better reflect public priorities and needs.
What is the requirement for consumer engagement?
There is a legal requirement for water services in the UK – including both regulators and providers – to consult their service users. They must seek to hear from customers and stakeholders on all major decisions, including price reviews, service reviews and business plans.
Water companies must demonstrate that they have not only heard consumer views, but also considered them and acted on them where feasible at every stage of planning and delivery.
Ofwat and the Environment Agency require consultation on business plans, pricing proposals and investments. Water companies must demonstrate public feedback has impacted decision-making. The key mechanisms for this engagement include:
- Customer Challenge Groups (CCGs): CCGs are independently chaired bodies made up of a combination of relevant businesses and local authority agencies. They play an important role in scrutiny.
- Public consultations: Formal processes to gather input from communities on policy, service improvements and new infrastructure.
- Citizen panels and assemblies: Smaller deliberative groups that can further explore complex decision-making and spending decisions.
- Stakeholder workshops: Engagement with regulators, local authorities and environmental organisations in a structured setting.
The exact mechanism required for a given decision will vary depending on context according to the overall water and sewerage policy framework set out by the Department of Environment, Food and Rural Affairs (DEFRA).
“We expect all companies to be engaging with customers to make sure their plans take account of customers’ needs, priorities and preferences.”
– Ofwat
Types of engagement in the water services cycle
There are various points at which it is a regulatory requirement for water companies to consult the public. There are also times where there is no statutory requirement, but consultation can still prove useful to decision-making. These include:
Planning
During long-term, strategic planning, water companies will set their priorities for investment, new infrastructure and infrastructural improvements. Engagement at this stage is crucial in order for these decisions to have legitimacy with the public. This is particularly true where there is going to be an immediate impact on a specific area, like when building a new reservoir.
The types of engagement appropriate for this phase include:
- Public consultations, in order to gather broad feedback from all those who may be impacted.
- Citizen panels to allow a representative group to deliberate on these issues in more depth, exploring the trade-offs decision-makers face.
- Regulatory reviews, which require evidence that customer reviews have shaped the planning process.
For example, every five years Thames Water creates a new five year business plan. At the start of this process, they conduct a large-scale public consultation.
“Feedback from our customers and stakeholders is really important. Our plan looks at how we supply water to our nine million customers so it’s vital we get it spot on. That’s why we’ve revised the parts of the plan based on the feedback we’ve already had and now want to hear more on the changes we’ve made.”
– Head of Environmental Regulation, Thames Water
Service Delivery
Day to day operational decisions – particularly around contentious issues like pricing – require an ongoing and transparent engagement process with customers. This can be achieved using:
- Customer surveys and digital feedback forms. While less formal than a public consultation, this allows an ongoing two-way dialogue with customers that can be deployed reflexively using a purpose-built digital engagement platform.
- Focus groups in order to test proposals before announcing to the general public.
- Interactive simulators, which help consumers understand how pricing decisions are made.
In Australia, Yarra Valley used Simulator in order to demonstrate that they had invited and listened to customer feedback on their pricing decisions.
“We embarked on one of the most comprehensive customer engagement initiatives the Australian water industry has ever seen. The outcomes have provided a platform to ensure we have a clear understanding of our customers’ needs and expectations.”
– Price review report, Yarra Valley Water
Environmental
Environmental concerns are common complaints about the water industry, and water companies must engage the public to demonstrate that they are doing all they can to minimise environmental damage. Common engagement methods include:
- Calls for evidence, particularly around water quality and pollution levels in waterways.
- Stakeholder workshops, where local environmental agencies and nature protection groups are invited to voice concerns they may have with current practice.
Crisis
When incidents occur, engagement must be timely and responsive. Water is perhaps our most essential utility, and maintaining service levels is therefore of utmost importance. This can only be done by maintaining good communication channels with the public.
Customer engagement is often viewed as time consuming or administratively unwieldy, but the widespread use of digital tools is changing this. Examples include:
- Geospatial mapping. Using new engagement tools, customers can map areas that are currently experiencing flooding, where they have noticed issues with waterways, or where service levels are not meeting expectations.
- Real time updates. It is essential that water services have easy to deploy methods to provide ongoing updates to consumers.
The benefits of improving consumer engagement
The clearest benefits to improving consumer engagement with water companies and services is that it has a direct impact on customer satisfaction. When customers are actively involved in decision-making about pricing, service levels, infrastructural investment and decisions, there are two key results:
- Customers feel listened to and involved, building their trust in those responsible running the service.
- Companies are better equipped to make choices that reflect public priorities and maintain regulatory compliance.
Demonstrating accountability
By consulting consumers and engaging the public in how their water services are being run, water companies can demonstrate that their actions are informed by public opinion as opposed to simply profit. Feedback collected through consultations provides regulators and stakeholders clear evidence that companies have considered a broad range of perspectives. This satisfies regulatory requirements while also reinforcing the idea that the organisation is ultimately responsible to the public and must act in their interest.
Transparency and trust
A large part of accountability is demonstrating transparency. Done well, engagement is a clear process where participants – and consumers in general – can see how contributions have influenced decisions. Digital platforms like Citizen Space and Simulator allow companies to publish consultation results, feedback and contextual information to demonstrate how feedback was used. A willingness to show clearly how each stage of the process was managed has the effect of building trust in the overall process. It is essential that the public trusts those responsible for something as vital as their utilities.
Better decision-making
Finally, and perhaps most importantly, customer engagement can lead to better decision-making. Customers can provide valuable insights into their priorities, that may otherwise be missed by decision-makers. That includes local area knowledge, service experiences and environmental concerns. By involving consumers through interactive tools and consultations, water companies gain access to detailed, place-based knowledge that can strengthen policy and investment decisions.
That’s why when Scottish Water were reviewing their strategic plan, it was important to them to get as wide participation from the public as possible. They chose to use digital platform Citizen Space, in order to ensure the maximum possible accessibility:
“We want to hear whether customers think we have identified the right priorities to build on our successes in the years ahead. We also want to listen to customers’ views about future charge levels and the extent to which they would like to see service improvements in return.”
– Chief Executive, Scottish Water.
Citizen Space is the go-to platform for connecting governments, developers, and citizens. If you’d like to learn more about how our software can support customer engagement in water services, book a free demo and we’ll walk you through it.
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