UNSIGNED MINUTES OF THE CONSUMER COUNCIL FOR WATER NORTHERN COMMITTEE. The Malmaison Hotel, Manchester. ON Tuesday 8 April 2014 AT 10 AM

Transcription

1 NRT/14/09 UNSIGNED MINUTES OF THE CONSUMER COUNCIL FOR WATER NORTHERN COMMITTEE AT The Malmaison Hotel, Manchester ON Tuesday 8 April 2014 AT 10 AM Present: Chair: LCAs: CCWater Staff: Andrea Cook Judith Mashiter Sue O Brien Hilary Putman Barbara Leech Miriam Little Janine Shackleton Andrew White Policy Manager Assistant Policy Manager Consumer Relations Manager Senior Policy Manager Also present by invitation: Gill Anderson Stuart Braley Gary Dixon Ian Donald Kevin Ensell Julie Hall Adrian Kennedy Dr Annabelle May Josh Mitchell Graham Neave Dean Stewart Mike Stokes CCWater & Stakeholder Manager, United Utilities Auriga Services Customer Service Director, United Utilities Customer Service Manager, Northumbrian Water Water Operations Manager, Hartlepool Water Billing and Income Manager, Hartlepool Water Head of Regulation, Yorkshire Water Inspector (Regulations), DWI (plus 1 other DWI representative) Graduate Management Trainee, Hartlepool Water Operations Director, Northumbrian Water Consumer Policy & Strategy Manager, Yorkshire Water North West Environment Planning Manager - Water Resources 1

2 1. Chair s Opening Remarks 1.1 The Chair welcomed attendees to the nineteenth meeting of the CCWater s Northern region. 1.2 The Chair also welcomed Miriam Little who had recently been appointed as Assistant Policy Manger for CCWater Northern Region. 2. Apologies for Absence 2.1 Apologies were received from Ruth Reaney (Natural England). 3. Listening Session 3.1 No issues were raised under this item. 4. Minutes of the last Meeting (October 2013) 4.1 No amendments were received and the minutes were agreed as an accurate reflection of the meeting. 5. Matters Arising 5.1 Hartlepool Water (HPL) had agreed to specify any implications of the Water Bill forhartlepool customers, as opposed to the wider Anglian area. This had not yet been provided, but would now be addressed. Action: Hartlepool Water 6. Chair s Report 6.1 The Chair commented that a lot of recent activity had been focused around the PR14 Business Plans. Ofwat s latest methodology changes mean that companies which have not achieved enhanced status must either resubmit their business plans in May (for a June draft determination) or in June (for an August draft determination). 6.2 The Chair confirmed that Ofwat had decided that South West Water and Affinity had met its requirements and had been awarded enhanced status. Both companies have accepted this, and in doing so Ofwat s cost of capital assumption. 6.3 The Chair commented that the future role of CCGs remains under consideration and a decision has yet to be made although there is an expectation that companies will address this in their business plans. In the short term Ofwat expects CCGs to submit additional comments on companies revised business plans. 2

3 7. Policy Managers Report 7.1 Water UK published details of companies average household bills in February and CCWater issued a press release. Andy White was interviewed about this on the Radio 2 Simon Mayo show. 7.2 CCWater has submitted its final response to the Ofwat consultation, Wholesale and Retail Charges and has added this to the CCWater website. The response highlights the following key issues: Bill stability is important. Any improvement to the cost reflectivity of charges over time should be prioritised, based on a clear understanding of the overall consumer benefits which would result from changes. An improved standardisation of charges in England may deliver some benefits for market participants but the incidence effects of making such changes are currently unclear. Improved information on this issue is needed. 7.3 The UK Government has launched a consultation on its Child Poverty Strategy 2014 to The strategy references WaterSure and the development of customer-funded tariffs but does not propose any further new measures to address water poverty. CCWater will be submitting a brief response. 7.4 CCWater has published its money saving tips press releases to coincide with the water companies main billing period. The Daily Express has featured the CCWater metered bill calculator in the first of a three part series offering money saving advice to its readers. The guide appears in print and online: The Silk Independent Commission has undertaken a review to examine devolution arrangements in Wales. On 3 March 2014 the second set of recommendations relating, amongst other things, to water were issued. The recommendations include proposals that : Powers over sewerage should be devolved to the National Assembly for Wales. The boundary for legislative competence should be aligned with the boundary for national competence. CCWater will be submitting a brief response with its initial views on potential repercussions of the Silk Review recommendations on water customers, for the consideration of the Welsh Affairs Committee during its scheduled discussion evidence. This is likely to state that: 3

4 A formal intergovernmental protocol should be established in relation to cross-order issues. The removal of the Secretary of State s executive powers should bereplaced by intergovernmental protocol. 7.6 CCWater s response to the Welsh Government consultation on Tackling Bad Debt within the Water Industry in Wales has been submitted and placed on its website. This consultation related to the development of the Regulations to allow the implementation in Wales of the provisions originally included in the Floods and Water Management Act 2010, which provides for landlords to be liable for water charges if they do not pass on the details of their tenants to water companies. 7.7 Consumer Futures Scotland formerly represented the interests of water customers in Scotland. On 1 April 2014 this duty transferred to Citizens Advice Scotland. The charging, billing and collection regime in England and Wales is very different to that in Scotland, where water charges are collected with Council Tax by the local authorities on behalf of Scottish Water. Before its closure, Consumer Futures Scotland met with Andy White and Barbara Leech to present the findings of its report into household water debt in Scotland, Keeping your heads above water. 7.8 The report concludes that: Debt (including water debt) is a cause of distress for those who can t pay. There is a direct correlation between debt and deprivation in Scotland. Water debt has a cost for local authorities and Scottish Water. Overall, water debt results in an increased burden on all paying consumers. 7.9 The report supports an ongoing review of the current household charging scheme in Scotland to assess whether it meets key principles, such as fairness,efficiency and affordability. It recommends that a similar working group assesses the suitability of the debt management framework within which local authorities operate (functions and powers, processes and practices, monitoring and oversight, etc.) to deliver positive outcomes for consumers impacted by water debt and provide the best protection possible for consumers in vulnerable situations Work continues to ensure that water companies participating in third party marketing activity are aware of the results of CCWater s recent research and Board position on the promotion of such products. All local offices have been asked to work with their companies to ensure that any third party marketing material: Clearly references the third party organisation. 4

5 Provides clear and simple opt out of future direct mailings information. Provides clarity on the cancellation options for advertised policies DWP held one of its regular liaison meetings with the water industry. DWP advised that Water UK is pressing Government to amend the Universal Credit Regulations, by removing the restriction for a maximum of three direct deductions from Universal Credit, in view of an overall cap of 40% of the standard allowance CCWater has launched a consultation on collecting and publishing information from water and sewerage companies. The aim of this consultation is to agree an approach to changing the information that CCWater collects from water and sewerage companies and makes relevant comparable information available to consumers and stakeholders Due to the extensive discussions CCWater has already had with companies the consultation will run for a period of 6 weeks. The closing date for responses is 2 May Complaints Report 8.1 For the period 1 September February 2014 CCWater had seen a drop of 106 complaints (-16.8 %) against United Utilities (UU), compared to the same period last year. The highest sub-category was disputed liability for metered charges, which was down by 16.9 % compared to last year. There has been a 28% increase in the failure to respond sub-category, compared to last year. 8.2 CCWater has seen an decrease in complaints of 95 (-33.7%) against Yorkshire Water (YKS) for the period 1 September February The highest sub-category was disputed liability for metered charges, which was up by 28.5% compared to last year. 2 investigations have been carried out against YKS in this period. 8.3 CCWater has seen an decrease of 55 complaints (-30.8%) against Northumbrian Water since the period 1 September February The highest sub-category was disputed liability for metered charges, which was up by 13.3% compared to last year. 8.4 CCWater has seen a decrease of 1 complaint (-33.4%) about Hartlepool Water in the period 1 st September February

6 The highest sub-category was disputed liability for metered charges. 8.5 The Consumer Relations Manager commented that nationally, the highest sub-category for complaints is the same for all companies; disputed liability for metered charges. They added that Stage 2 referrals have significantly reduced and that things are very positive in terms of complaints decreasing. 8.6 YKS advised that some of its procedures and processes have been changed, as there had been some training and staffing issues which had contributed towards the 2 investigations carried out by CCWater. 8.7 UU advised that as part of its pilot scheme in Warrington, it now has 29,000 properties metered, with refuse vehicles taking readings. The meters are able to transmit alarms, for example in the case of a leak; this information can then be used by UU to proactively contact customers, to advise them of any issues. UU teams are also contacting customers to pre-advise them of their consumption and predicted bills. UU plans to roll this scheme out to around 750,000 meters in Manchester and Liverpool. It is hoped that this proactive approach will help customers to better understand their water usage, as misunderstandings and forgotten usage are largely what lead to customers disputing their meter charges. 9. Environment Agency Report 9.1 Mike Stokes from the Environment Agency (EA) presented the report. 9.2 As of 1 April 2014, the EA organisational structure has changed, from a 3- tier to a 2-tier organisation. There will no longer be regional teams but there will be Area Hubs. In practice, this means that rather than being part of the North West team, Mike is now part of the National River Basin Management Team. Steve Moore is now the Account Manager for the Northern Hub (YKS, NW and UU) and Marie Fallon is the Account Manager for Hartlepool Water. 9.3 The EA reported that it has completed its consultation on Significant Water Management Issues (SWMI s), entitled, Challenges and Choices. This received a very positive response rate in the North, with around 200 consulation replies. The respondents were largely in agreement with the EA s assessment of SWMI s, although some felt that the importance of tackling Invasive Non-Native Species had been underplayed. A formal consultation response will be published in April There are plans for the EA to continue working with partners, in developing cost-effective actions for delivering Good Status/Potential using a catchment approach. The EA will consult on draft River Basin Management Plans and Flood Risk Management Plans, between September and December

7 9.5 The EA confirmed that it will continue to actively engage with all Northern companies around their Business Plans. It has used its Phased National Environment Programme and company engagement to get outcomes for people and the environment into these Plans. 9.6 The EA reviewed company Business Plans and sent a national reply to Ofwat with its findings, including company-specific annexes (which were shared with each respective company). Work continues to be done with companies, to understand the possible implications of the recent Ofwat announcements upon the delivery of the NEP and flood risk-related outcomes in PR It was also confirmed that the EA is continuing to work with companies through the Defra-led Water Resources Management and Drought Plan processes. The key risks for this are UU s West Cumbria supply zone, with issues around the environment and customer restrictions. 10. Company Operational Reports 10.1 United Utilities United Utilities SIM score for Q3 was The cumulative score was This represents a 21% improvement in overall performance against the same period last year UU advised that it had introduced a Special Discount for its customers of 2.50 per service. In most cases, this will equate to a 5.00 saving for its domestic customers from their charges. This has generally been well received by customers UU advised that as of February 2014 it had seen a 17.2% increase in registrations to its My Account portal on the previous year. There are now over 330,000 customers registered for it, which represents around 10% of the customer base UU is continuing to promote its Support Tariff and has seen an increase in the number of longer-term debtors applying for and being accepted onto it UU advised that it is committed to progressing the introduction of a Social Tariff and will continue to work closely with CCWater on this issue UU provided an update on its Arrears Allowance Scheme. The acceptance ratio for the scheme remains at a high level and the response has been very encouraging, with around 50% of customers receiving the double matched incentive (meaning that they have been on the scheme for at least 6 months) UU advised that it has implemented a strategic partnership with Payplan, a non-profit, money advice organisation. Training has been provided to agents 7

8 in the Payments Assistance and Careline Teams and they have been encouraged to promote PayPlan to customers The company is in the process of starting a trial with national insolvency practitioners, FRP Advisory. This is designed to make it easier for UU to gather information about insolvencies and deal with them more proactively UU advised that work is continuing on its credit reference agency data sharing project and that it is on track to start sharing data with Equifax in summer During 2013, there were 27 DWI notified events in category 3. There were 2 category 3 process events at Wybersley WTW during 2013, for which UU has submitted a draft undertaking of actions to the DWI Hartlepool Water Performance for the SIM qualitative element for the year ending 2012/13 was The first 3 quarterly scores for 2013/14 averaged It was noted that there were 5 water quality events reported to DWI during 2013, rather than the 4 referred to in the HPL report Water Safety Plan: A 4m programme of works is being undertaken at the Dalton Piercy treatment works to install treatment using UV technology. Further work is also planned during 2014 to enhance the security of boreholes on remote sites PR14: The Hartlepool Independent Panel has completed its work for the Business Plan submission. Upon agreement of the Plan, the Panel will set out an appropriate engagement and consultation strategy Northumbrian Water Performance for the SIM qualitative element for the year end was NNE advised that the trunk mains cleaning in Newcastle and Gateshead was progressing well. There had been some access issues in the city centre; however, night time working had proven effective in easing the access issues, particularly in terms of time delays. Ice pigging has also proven to be a very effective method and saves a lot of time compared with conventional cleaning methods Yorkshire Water Yorkshire Water s SIM score for Q4 was The cumulative end of year score was YKS advised that its Blaster SMS proactive communication service had been well received by its customers, with just 0.86% choosing to opt out of the 8

9 service. There are future plans to further develop this service, extending it to landline telephones YKS advised that during 2013, there were 5 DWI notified events in category There was some discussion around the impact of the current economic position at a regional level and it was agreed that this would be considered as a topic for a future public meeting. 11. DWI Report 11.1 The report provded by the DWI was noted. The DWI reporting period was from 12 July 2013 to 28 February It was noted that the DWI has a backlog of legal instruments which are awaiting sign-off. This is due in part to increased workload in other areas and the workload associated with PR The DWI is going through a period of significant change and is in the process of filling 5 vacancies for Inspectors The Chair thanked the DWI for its contribution to the meeting and acknowledged the work being achieved by its employees under challenging circumstances. 12. Charges 2014/15 and company affordability packages 12.1 CCWater provided a brief overview of: Bill Changes for 2014/15 Charges Schemes Affordability Schemes and Social Tariffs. Bill Changes for 2014/15: 2014/15 is the final year of the period of price limits, set by Ofwat in CCWater has been among those leading the call for water companies to do more to ease the financial burden on their customers. In response, several companies have taken steps to keep bills down. Overall, the average household water and sewerage bill rose by 8 (2%) from 385 to 393 in 2014/15. Charges Schemes: 9

10 No significant changes were made to Charges Schemes in 2014 by the companies in the Northern region. It is expected that Charges Schemes for 2015 onwards will need to reflect the separation of wholesale and retail charges, in preparation for market reform. Afforability Schemes and Social Tariffs: Companies in the Northern Region did not introduce any customerfunded social tariffs for 2014/15. The total number of schemes in operation across England and Wales is 6 (3 new social tariffs were launched in the South East region). CCWater is continuing to work with a number of companies on the development of social tariffs The companies were invited to: Comment on the implications of market reform to their Charges Schemes; and Provide an update on their approach and plans in terms of affordability and social tariff schemes Yorkshire Water (YKS) presented its response to these points (slides available on request). The average bill increased by 6 for to 373. This is the agreed retail price index (RPI) increase only as YW has not taken its price limit K of 1.6%.This has been received positively by its customers. There will therefore be no increases above inflation for the next 6 years because of the business plan proposals. Implications of market reform: Systems will need to be updated, to ensure accurate and timely billing. The display of charging information on bills may change, so it is important to keep things simple and clear for customers. Individual bill values may also vary, which is another reason why clarity is needed. YKS believes that it is important to manage change and to learn from the consultation that it carries out. Social tariffs: Research conducted on behalf of YW found that customers are unwilling to subsidise those struggling with their bills. However, YKS is keeping this under constant review. It noted that opposition to a social tariff decreased when customers were provided with more information about it. YKS currently offers a portfolio of support packages to customers, i.e. flexible payment plans, WaterSure, Community Trust, free meters, budgeting advice, Resolve, Water Direct and water efficiency advice. 10

11 YKS highlighted two of its affordability principles. support is accessible to all and; schemes of support are provided to customers when they most need it. YKS added that financial support is there for those currently in arrears but it is looking at using the information it obtains through its membership of Credit Reference Agencies to develop some assistance for those not yet in arrears but identified as financially vulnerable United Utilities (UU) presented its response (slides available on request). Pricing for 2014/15: Customers bills will increase for 2014/15 and the average household bill will be 415. This represents an increase of around 12 (3%) compared with last year s average. The average bill amount does not include the 5 direct debit discount, or the one-off special discount. Non-household customers will receive a discount of 1.2%, based on their annual consumption for 2013/14. Charges Scheme: This will remain in the same format at last year, with no material changes. Support Tariff: UU is continuing with its pilot of the support tariff for household customers living in specific post code areas of its region. Single occupier assessed charge (household): The volume used to calculate these charges have been reduced for 2014/15 in line with recent consumption trends of household customers. Special discount: Household customers are being offered a one-off special discount for 2014/15. This will equate to a maximum discount of 5 if they receive both services ( 2.50 per service). Social tariff: UU has worked closely with CCWater and has completed research with its customers. It is currently considering how to progress with the introduction of a tariff in discussion with CCWater Hartlepool Water (HPL) presented a written response (report available on request). Pricing for 2014/15: The average water only bill will be 145. HPL has chosen to abate its water K price limit of 0.9%. As a result, customers on average will see below inflation increases to their bills. Social tariff: Anglian Water (AWS), the parent company of HPL Water, is considering the introduction of a social tariff from 1 April This will also be available to customers of HPL and will provide additional support to those customers struggling with their water bills. A customer consultation 11

12 exercise will be undertaken in the next few months and will include customers in the HPWL area. AWS is proposing a targeted approach, with customers financially assessed by a third party, such as Citizens Advice. Those identified as needing additional support would then be able to access a discounted tariff Northumbrian Water (NNE) presented its response (slides available on request). Pricing for 2014/15: There are no changes to the tariff structures. A new charge of 2% for payments made by credit card will be introduced to reflect the costs incurred by NNE. NNE has doubled the time limit to twenty four months to allow customers who opt for a meter more time to see if a meter is beneficial before reverting to unmeasured charges. NNE acknowledged that there are high levels of income deprivation in its area and that there are a significant number of customers struggling to pay their bills. NNE aims to build upon its existing affordability measures; for example, having the ability to complete warm transfers to StepChange debt advice charity after a need for debt support is identified. NNE wants to ensure that it tailors support to customers on an individual basis, rather than adopting a one size fits all approach. Social tariff: NNE is considering the introduction of a social tariff from April 2015,however this must be acceptable to NNE s customers. Research will shortly be undertaken to determine how much customers are willing to pay to subsidise any such tariff. Future tariffs - requirements for 2015/16: NNE will need to develop wholesale and default tariffs and set household tariffs that comply with the new wholesale price control and the water and sewerage price controls. It will work on 3 or 4 charging schemes. NNE discussed some of the challenges it faced in terms of its work around future tariffs. A main area of concern is that the non-household impact of the changes will be disproportionately higher on smaller, contestable organisations (e.g. community centres, small businesses) than on larger companies, which would be more likely to benefit. 13. PR14 Risk and Reward (inc Outcome Delivery Incentives) 13.1 The companies present were invited to contribute to this discussion on an in confidence basis whilst recognising some of the limitations of where they were in the process of revising their business plans. - A general discussion then ensued delivery incentives. regarding risk, reward and outcome 12

13 14. Any Other Business 14.1 Companies yet to respond to CCWater regarding availability for the proposed DWI Report Launch in July were asked todo so. 15. Date and Time of Next Meeting The next meeting will take place on 16 October 2014 in Leeds. 13