Transport, Infrastructure and Climate Change Committee, 07 Oct 2008

Meeting date: Tuesday, October 7, 2008

Official Report 205KB pdf

---

Scottish Water Annual Report and Accounts 2007-08

Agenda item 3 is our main business of the afternoon: an evidence-taking session with Waterwatch Scotland. I welcome Gary Womersley, chief officer; Jim Black, head of customer support; and Tom McClements, who is the national service quality committee chair. I invite Mr Womersley to make some opening remarks before we get going with questions.

As you have mentioned, I have with me Tom McClements, chair of our national service quality committee, and Jim Black, who is head of customer support. Waterwatch Scotland is a national statutory second-tier complaints handling organisation—often referred to as an ombudsman organisation—for Scottish Water and all domestic and non-domestic customers. It is the customer representative body for the water industry in Scotland. We welcome being invited here this afternoon to comment on Scottish Water's annual report.

I would like to hear your general view about Scottish Water's performance in 2007-08. Are there any areas where you think improvement has taken place?

We are broadly supportive of Scottish Water's progress to date. A dynamic and momentum of continuing improvement has been created on many fronts. In our dealing with customer contacts and complaints and in holding regional panel meetings throughout the country, we noted a decrease in the number of contacts that we have received from customers of Scottish Water; the volume of complaints has reduced by 65 per cent, which is a substantial amount.

There have been improvements, and I welcome Scottish Water's greater emphasis on customers, but it would be incorrect to say that it has got there entirely; there are cultural issues and other on-going elements to address. The key aspect for me is that, in its feedback, Scottish Water has been extremely receptive to working further to introduce more qualitative performance measures and to make progress on the customer service work that has been done to date.

The Water Industry Commission for Scotland's customer service report suggests that Scottish Water has scope for improvement in sewage treatment compliance and pressure, which is inadequate. Do you agree? Should anything else be added to the list of areas in which there is room for improvement?

We are generally supportive of WICS for raising those two aspects, but there is also room for improvement in other areas. Scottish Water needs to make progress on the overall performance assessment measures by comparison with water companies in England and Wales. It is still having to play catch-up, although we welcome the progress that has been made. As has been correctly identified, Scottish Water's OPA scoring in various areas might not be as high as might be desirable.

Our other areas of concern perhaps fall on the periphery of OPA scoring, which is primarily a quantitative measure. Most contacts that we receive are on the qualitative aspects of customer service. On issues such as external sewer flooding, which are not in the OPA scoring, we have noticed an increase—both as a proportion of the overall figure and in real terms—in the number of customer contacts that we receive.

Persistent odour problems are a continuing issue around the Dalmuir sewage treatment plant in my constituency, and I understand that similar issues persist in Seafield in Edinburgh. Susan Deacon and I actively pursued Scottish Water on those issues. Although some improvements have been made, it seems that the persistent underlying problem remains. In part, that is due to the design of the plants and—certainly in the case of Dalmuir—the management of those plants, which were built under the early stages of the private finance initiative. What is Waterwatch's role in dealing with odour problems? Is it concerned about the relationship between Scottish Water and the operators of such plants? Do any issues arise from the inadequate design associated with those plants?

That question covers—dare I say it—myriad issues. I will try to address each in turn.

It is correct to say that we are contacted about problems of odour—it tends to be called malodour in the industry—but, over the piece, the number of contacts about odours emanating from water treatment works or waste water treatment works has reduced considerably. When Waterwatch Scotland was set up, we expected a large number of our customer contacts to come under the heading of malodour problems. The situation that existed before we came into being certainly suggested that that was a reasonable assumption.

The work that was commenced by the Scottish odour steering group—a body that includes Waterwatch Scotland, Scottish Water and local authorities—appears to have been successful, at least initially, in prioritising malodour issues, particularly those from waste water treatment works. Basically, the number of customer contacts that we receive about malodour has fallen off the radar. In other words, we receive one or two such contacts a year.

You are correct to refer to Dalmuir and Seafield because, notwithstanding the work that has been done by the Scottish odour steering group, which would appear to have been largely successful, the two plants that still give cause for concern are Dalmuir and Seafield. A large part of the problem is that both plants are operated under a private finance initiative/public-private partnership scheme and we have to consider the original contract specification and so on. Scottish Water is making its best endeavours to remedy that, but my understanding is that the PFI contract puts constraints on possible remedies. I hope that that addresses your question satisfactorily.

The list of plants that were being prioritised did not include Dalmuir and Seafield. That is possibly because of the scale of the problem and because a solution could not be identified for those plants, unlike other plants. There is a danger that people get fed up complaining and just stop doing so if they do not see improvement. I do not think that there is an absence of complaints about Dalmuir and Seafield, but even if there were a reduction in the number of complaints, that would not necessarily mean that a solution had been found. I will certainly press Scottish Water to come up with better solutions to the problems at Dalmuir, and I am sure that the representatives for Edinburgh will do the same for Seafield.

I agree that a lack of complaints does not necessarily mean that customers are satisfied. We are aware that complaint fatigue can set in. We still receive contacts about Dalmuir and Seafield. We have experienced a reduction in the number of complaints about malodour in respect of other plants that were prioritised—Dalmuir and Seafield were not on the list—which I do not think is to do with complaint fatigue. It would be wrong for me to seek to give an authoritative reason why Dalmuir and Seafield were not included on the list of plants that might be prioritised, but I suspect that it was largely because of the constraints to which I referred.

Perhaps we can return to that when we speak to Scottish Water.

Have you had any complaints from people in Harpsdale near Halkirk in Caithness, which is a fairly flat area where lots of new housing is being built? There have been complaints about inadequate water pressure. There has been a flurry of interest in that among MSPs. Has Waterwatch heard about any of that?

I cannot say for certain without going through a list of all the contacts that we are dealing with, but I have to say that it does not ring any bells. We have fairly good systems to record thematic contacts. I cannot say whether we have received contacts about Harpsdale, but, given that we are a second-tier complaints-handling body, there is often a time lag between an issue manifesting itself, people going through due process, whether with Scottish Water, their provider, their MP or MSP, and our getting involved.

Notwithstanding some of the quantitative successes that have been mentioned, the general issue of development and low pressure needs to be looked at. There have been successes—it would be wrong for me not to state that—but it is still an area that gives us cause for concern.

There is a great emphasis on leakage at the moment. We find that short-term operational solutions that are used to mitigate or correct leakage—or other problems about which we or MSPs might be contacted—often manifest themselves as low pressure. I would like to think that that is based on more than anecdotal evidence. Those problems are hard to deal with and can blight small communities as a whole, which, as the figures show, can suffer from low pressure for not inconsiderable periods of time. We are working further with Scottish Water on that issue. A concept of no service, no fee is being introduced, but that is a short-term solution at best; my preference would be to deal with the low pressure.

That is interesting, because it seems that people are yet to cotton on to the fact that Waterwatch can aid their case. We will return to low pressure in rural communities when we question Scottish Water.

According to the drinking water quality regulator's annual report for 2007, there was a 16 per cent drop in customer contacts to Scottish Water that year, but Waterwatch's figures for the same period indicate a 120 per cent increase in contacts by domestic customers to Waterwatch. Why is there a difference? What is the true picture of the level of complaints: was it rising or falling?

There is a slight timing issue with the release of those reports. The number of contacts from Scottish Water customers certainly increased initially, and there are several possible reasons for that. We are a fairly new organisation and were the new kid on the block in 2007, so I dare say that an element of the increase was complaints that were already out in the industry.

So you were sort of mopping up at that stage?

That would have been a factor. The increase might also have been partly attributable to better recording systems. That would have been quite a significant aspect, because we were correctly recording a lot of complaints and the dissatisfaction that existed.

Another significant aspect was Waterwatch Scotland obtaining its new powers to deal with statutory second-tier complaints. Obviously, a degree of promotional activity for the brand and the organisation was associated with that, and our contact data show that, whenever there is an increase in our profile, there tends to be an increase in the number of contacts from customers. One of the general points that we distil from that information is that there are probably customers who are dissatisfied in some way but, for whatever reason, have not expressed their concern. When council tax leaflets or other materials that mention Waterwatch Scotland go out, we get peaks in contacts.

There may be various reasons for the increase, but if we were to examine the figures in our annual report I think we would see a slight decrease in the number of contacts that we have received, which would tie in with the figures in the drinking water quality regulator's report to which you referred.

If the increase in the number of cases that were reported to you in 2007 was a blip, was there any noticeable trend in the nature of the approaches or complaints, or was it a general increase?

Are you still asking about complaints about drinking water quality or complaints in general?

In general, was there any trend within the increase?

Yes. One of the key trends that we have noticed is that the largest number of customer complaints comes under the Scottish Water customer service heading. That tells us that it is still within Scottish Water's gift to remedy those complaints.

If someone complains about low pressure, or about odour at Dalmuir, there might not be a short-term solution, but the majority of contacts that we receive are about customer service. That is why we welcome the 65 per cent decrease in second-tier complaints—between the statistics that you quoted and the statistics that we are likely to publish next. We said last year that, notwithstanding the fact that complaints had increased, there were a lot of potential quick wins for Scottish Water through simple management, operational and cultural changes. We are already seeing a manifestation of that. In year 1, a third of all contacts concerned Scottish Water customer service—not leaky pipes or whatever. Probably another 20 per cent of contacts were on charging and billing. Together, they made up 50 per cent of all customer contacts. Thereafter, the most common issues were leakage, pressure and external sewer flooding, which is significant because contacts on it are increasing.

You indicated that the number of customer contacts is tailing off. Is that a normalisation of the process, or is there another reason?

I do not have a definitive answer to that. One element may be to do with the visibility of Waterwatch Scotland—that might be partially responsible. Another is that Scottish Water had the potential for a lot of quick wins. In fairness to Scottish Water, it seems to have taken on the challenge of putting short-term solutions in place. However, the life cycle of complaints-handling bodies is that, in the early years, there tends to be a fairly substantial and quick decrease in the number of second-tier complaints, after which the figure increases slightly before plateauing. Our organisation is still at the decrease stage, because we can give effect to the quick wins. We are being left with the complex, the convoluted and the hard to do. We are at the stage when we can get the quick wins out of the road.

The Water Industry Commission for Scotland's "Customer service report 2006-07" states that there was a drop in Scottish Water's performance on its response to written complaints. What is your experience of Scottish Water's response to written complaints?

Most of the dialogue that we have with Scottish Water concerns complaints in general, and written complaints are a significant aspect of that. Many improvements were required and many have been made, for example in relation to tone, language and demeanour. We were keen to insist on the concept of deadlock because we found that, by the time people complained to us, they were often complaining about the fact that they had had a complaint with Scottish Water for two or three years. We have introduced the concept of deadlock and now require Scottish Water to deal with complaints not only correctly and robustly, but timeously.

Notwithstanding Scottish Water's desire to engage with its customers, there must be times when the deadlock point is reached and it says, "I am sorry, but we will have to agree to disagree. If you want to pursue the issue further, here are Waterwatch Scotland's details." We have been keen to work with Scottish Water on that and it is probably a significant factor in the decrease in the number of contacts.

The Water Industry Commission for Scotland has identified water pressure as a concern, particularly in rural areas. Is water treatment also a concern in such areas? I am thinking particularly about areas such as Berneray in my constituency, which still rely heavily on chlorination in a way that other places do not. Are you seeking improvements in the treatment process so that chlorination does not have to be relied on so heavily in some parts of Scotland? People write to me about the issue in relation to the taste of the water.

I conferred before responding to that question because it is perhaps better directed to WICS. The issue falls into its area of expertise and that of the DWQR, with regard to the need for co-ordination and so on.

I can answer the question only in general terms. Wearing my customer representative hat, I am obviously keen for things to be done as cost-effectively and efficiently—which does not always mean as cheaply—as possible. We are keen on the concept of water efficiency and providing for climate change. I do not know that we are the appropriate body to answer your question other than in the most general terms.

Has the issue of water taste not come across your desk?

We work with the DWQR, but we find that people seldom complain about only one issue. If someone complains about water quality, a leaky pipe or low pressure, it often turns into a complaint about that and customer service—hence our involvement. Our data tell us that over the piece, in a Scotland-wide context, water quality has improved. We have been pleased with the joint work that we have done with the DWQR to consider the chemical analysis aspects of water and, beyond that, to deal with its taste and the aesthetics, but those matters are more subjective and therein lie the difficulties. Efforts have been made to improve taste and so on, but it is perhaps for others to talk about whether there should be chlorination or chloramination.

I ask members and witnesses to keep questions and answers reasonably brief, or we will not make the progress that we need to.

A couple of my questions have been answered in the general discussion with Alex Johnstone.

Waterwatch Scotland's annual report for 2006-2007 requests a cultural change in the way Scottish Water treats general feedback or complaints information. Is that cultural change under way?

Yes, I am pleased to say that it is. The change is manifested in the 65 per cent reduction in second-tier complaints to which I referred. As with any aspect of cultural change, it takes time. I hope that I am not too naive in saying that I take a lot of comfort from the positive engagement and good dynamic that there has been with Scottish Water. I recognise that cultural change takes time and welcome the fact that Scottish Water's business plan reveals that a greater emphasis is being placed on customer service. I am always keen, by way of balance, to ensure that qualitative aspects of customer service are borne in mind as much as quantitative aspects, with which the OPA currently deals. On the whole, Scottish Water is certainly going in the right direction, but it will take time.

How are you encouraging that change?

It would perhaps be better in some ways to ask Scottish Water how robust we are being in our engagement with it in that regard. We are being appropriately robust when that is merited and, as with any organisation, we are also keen to work with it.

The cultural change is manifesting itself in various ways, including in the changes that have been made within Scottish Water's customer service section, in the reduction in the number of contacts and in the time taken to deal with issues.

That is manifest. Waterwatch's encouragement seems to be about being robust with Scottish Water.

It is more than that. For a culture change to work, both sides have to buy in to it. We were conscious of the dynamic between the organisations when we first received our increased powers. We could have jumped in with our tacketty boots on, but we chose not to. We decided to pick our fights carefully and hoped to work with Scottish Water and take it along with us.

In the short period of time to date, Scottish Water has seen the operational, management, staffing, and financial benefits of doing what we have suggested—rather than requiring us to use a stick to achieve the same results. That is a useful dynamic. It is too simple to say that we are being robust. We are appropriate, but I hope that we will continue to work together through our service quality committee and other committees to bring qualitative improvements, consultation and on-going customer service in various other areas.

Waterwatch Scotland's annual report for 2006-07 states:

"WWS has identified a requirement for GSS and MSS to be reviewed and developed further".

GSS is the guaranteed standards scheme and MSS is the minimum service standards. Why do they require review and development?

One of the key factors is the passage of time. For example, going to someone who has suffered from low water pressure for six years and offering them £10 or £20 is probably well intended, but it might cause an adverse reaction. Customers would say that they do not want the money; they want their water problems to be sorted out. That was certainly an element of the requirement.

The schemes also had to be realigned because payments were available for certain things that our contacts were telling us were almost no longer a cause for concern. The pot of money is finite, so why commit to paying for problems that are no longer problems? We would rather have GSS payments realigned to new areas of concern for customers. Hopefully, with respect to the dynamic of how we work with Scottish Water, that will give Scottish Water the incentive to put its efforts into areas that are costing it money, not those where it had committed to spend money but where remedies have been put in place in the meantime.

You have anticipated my supplementary question about how those standards can be developed. Are they being developed in that way?

Yes. Scottish Water has bought into the idea, and we welcome that.

The GSS provides for prescribed payments, such as £10 or £20 to someone who has not had water at a certain pressure for six months. It has been broadened to include the concept of no service, no charge, which has advantages over the current system. There are also areas in which we are trying to better align where payments could be made. I have some concerns because, ultimately, if I were a customer suffering from external sewer flooding, it might be okay for me not to have to pay water and sewerage service charges but, at the end of the day, I would just want the problem to be sorted. No service, no charge is a solution, but it might not be one for the long term. Our customer support team on service quality has a positive dynamic with Scottish Water and they are improving the system.

The other driver for change is that any measurement against which a body achieves more than 99 per cent no longer provides an incentive to improve. Both in Scotland and in England and Wales, it has been recognised that GSS measures have more or less had their day.

Another aspect is that such quantitative measures do not always reflect customer experiences. We are starting to move towards measuring customer experience, for example by trying to measure customer satisfaction with water taste—that was mentioned in an earlier question. It is all very well to comply with the water standards, but measuring customers' experience by asking whether they like the water and what they do about it is a different type of thing altogether. Such measures get much closer to the heart of how customers feel about the service that they receive.

Scottish Water uses the services of a claims handling organisation called Gallagher Bassett. There have been problems with the timing and content of Gallagher Bassett's communication with Scottish Water customers. Has that improved and is it now satisfactory?

Attempts have been made recently to improve the situation but, to be candid, the issue is still a cause for concern for Waterwatch Scotland. As I mentioned, we have a positive dynamic with Scottish Water but Gallagher Bassett is an external claims body. We can make culture and customer service improvements within Scottish Water but, without buy-in from external parties, I would say—if I were wearing a Scottish Water hat—that claims handling is an area of potential reputational loss for Scottish Water.

Do you think that it was a good idea for Scottish Water to outsource its claims handling?

Is that a leading question?

I certainly think that changes are needed. We have flagged up the issue as a cause for concern. Following workshops and so on, we have seen improvements in the interim.

There is also the overall concept of Scottish Water having claims handlers. Scottish Water might say that there are legal reasons for that but, ultimately, Scottish Water is self-insured. I can understand that there might be some requirement for a claims handler, but not at the level of the claims or contacts on which we have commented. There is scope for Waterwatch Scotland to flag up the problem and make some suggestions, but it is not for us to suggest what issues should be dealt with in-house. We have expressed dissatisfaction with elements of claims handling to date.

Scottish Water has made efforts to improve its in-house facility for dealing with complaints. I hope that that signifies a shift in emphasis from the external to the internal element of claims handling.

So Scottish Water now has someone handling the complaints about the complaints handling.

Indeed.

Your 2006-07 annual report states:

"there are customers who require guidance on how to make a complaint or seek detailed information".

Does Scottish Water do enough to inform customers about how to make a complaint or to find out detailed information?

That is one issue on which we have seen significant improvements. We are not yet at the perfect solution, but the situation is certainly much improved on what it was previously. That ties in with the reasons for customer contacts that were alluded to earlier.

For example, Scottish Water's website previously made no reference to the word "complaint". Internally—for management reasons, I think—the word "complaint" was felt to have negative connotations, so Scottish Water's website did not draw attention to complaints. We have worked with Scottish Water to reduce the number of mouse clicks that people need to make to find the appropriate information on Scottish Water's website for not only contacting Waterwatch Scotland, but raising concerns or formal complaints with Scottish Water and other stakeholders in the industry.

You are correct to flag up the importance of the appropriate signposting of bodies such as ours by the body with which they deal. Complaints handling leaflets now go out to customers and we have an appropriate presence on the council tax leaflet. The situation is much improved, although we are still not as visible as we could be. We continue to work with Scottish Water on that.

You say that there is a link to your website on Scottish Water's website, but what about its headed notepaper? There are still people who use snail mail. Does Scottish Water's headed notepaper draw attention to your existence?

No. We are in discussion with Scottish Water on the issues. To be candid, my preference would be for every customer who makes a written complaint to Scottish Water to be notified immediately of our existence. Good practice dictates that.

But you are not there yet.

A complaints leaflet with an agreed wording now goes in with cover letters. The situation is much improved, but there could be greater signposting in general. I do not disagree with the dynamic to which you refer.

Waterwatch Scotland carries out a formal audit of Scottish Water's handling of written complaints. That issue has been raised in one or two questions. This Thursday, my service quality committee will go to Scottish Water offices to examine files of written complaints. One question that we will ask is whether Scottish Water has provided the customer with a copy of the complaints procedure, which includes a description of Waterwatch's role. If Scottish Water has not done that in the files that we examine, that means an automatic fail in that process. The complaints audit is powerful in that it will in future contribute to Scottish Water's overall performance assessment score. Such an audit is part of the assessed customer service measure that is used in England and Wales at present and which will be incorporated in Scotland. Scottish Water's endeavour in its forward business planning is to achieve 100 per cent compliance, which means that it needs to show in the audits that it has flagged up the complaints procedures properly.

The audits also help to drive culture change, which was discussed earlier. We consider the tone and content of Scottish Water's response to customers. Once again, a qualitative measure is involved. The written complaints audit is a powerful tool in driving culture change as well as ensuring that complaints procedures are highlighted. I thought that that might be of interest to the committee.

Waterwatch Scotland's annual report for 2006-07 showed that 24 per cent of all second-tier complaints were still open. Have those been resolved and, if not, why do they remain open?

In general, the figure is much reduced. The annual report to which you refer was our first formal annual report that included complaints handling data, because of the increase at that time in our statutory powers. The figure included many complaints that were transferred from predecessor bodies. Because of the phenomenon to which I have referred, a proportion of the complaints that we were dealing with would previously have done the rounds but, by virtue of the fact that we were the new body, they were passed to us. They fell into the category of complex, convoluted and historical. Believe it or not, we inherited complaints that had been dealt with in one form or another for years. As I said when I talked about deadlock, that is completely unsatisfactory. If someone is not happy about something, they do not need to be told six and a half years later what the state of affairs is.

We have emphasised a reduction in our turnaround times. However, a large proportion of the complaints to which you refer fell into the hard-to-deal-with category—the complex, convoluted and historical complaints. Jim Black will be pleased with the gains that have been made in that regard. The number of historical claims is being reduced.

I guess that we want to know whether there is still a hard-to-deal-with file.

The bulk of the open claims have been dealt with. Our aim has always been to deal with complaints as quickly and robustly as possible, but we do not set an artificial time limit for how long we will deal with a complaint. The key is to get the complaint resolved, or to a point where we can assist no further, and we do that as quickly as possible. So complaint numbers have fallen year on year. As Gary Womersley said, we inherited a lot of historical files from the previous complaints handling body, which took up a lot of time and led to some of the backlog that was reported at 24 per cent. We will not be reporting so high a figure this year.

We look forward to the next report.

According to your 2006-07 annual report, the high level of customer contacts has

"led to file open times being longer than anticipated. WWS have identified that this will require to be addressed".

Has that been addressed?

Do you mean our turnaround times?

Yes.

They have been improved. This year, in respect of the last category of contact that Waterwatch Scotland has, we have noticed a trend towards a slight increase on our very ambitious turnaround figures. That has primarily been caused by less than satisfactory turnaround times by Scottish Water, Scottish Water Business Stream and other non-domestic retail service providers. We are looking at dealing with that internally.

On the whole, our turnaround time for complaints is much improved and could withstand comparison with any other equivalent body; it is very good. It is also significant that customers have to wait only one or two months before the complaint hits us, not two or three years. The duration of a complaint is now significantly reduced, and that can only benefit customers. Even when Scottish Water and, dare I say it, Waterwatch Scotland do not agree with the customer, at least they are told that within what I call a reasonable period. We aim to serve the customer's interests most times, but if they are going to be told no, that should be done sooner rather than later.

Waterwatch Scotland has been concerned about how Scottish Water communicates with customers, keeps them informed and provides accurate information, as well as about the tone of that communication. Some of my constituents have expressed concerns about that. How have those concerns developed, and what has been done to change the situation?

You are right about the tone of the communication and the language used—

People need to be kept up to date through an honest appraisal of the issues.

The general dynamic is much improved, compared to the position that our previous report described.

I will talk briefly about the historical culture. Scotland's water has always been a fairly emotive subject, even before Waterwatch Scotland came into being and received its second-tier complaints-handling role. Water issues hit the local and national press and a bunker mentality, dare I say, might have been encouraged because Scottish Water or its predecessors had had such bad press. We have tried to work through a positive dynamic to get away from that. If Scottish Water makes a mistake that is a no-brainer, we would prefer it to put up its hands and say that. There was organisational resistance to that. The resistance was not universal, but it could manifest itself in almost a refusal to concede that a mistake had been made, because it was thought that the mistake would appear on the front pages of newspapers the next day. We have tried to work around that and have said that complaints can be a positive thing. The change of mindset is, I hope, manifesting itself in the change of tone that there has been in communications.

It might be worth enlightening members about the committees of Waterwatch Scotland that help the process of dialogue with Scottish Water. We have four committees, consisting of members from throughout Scotland. There is the investment committee, the charging committee and the customer engagement committee, which is charged with considering how Scottish Water engages through consultation and written communication. It focuses on that. The remit of the service quality committee, which I chair, is to develop and agree customer codes of practice with Scottish Water. The Scottish Water code of practice that was recently published is an example of our working alongside Scottish Water to ensure that not only the standards and content of a document are correct, but its language too. The service quality committee agreed every page of that code of practice with Scottish Water. That tells members something about Waterwatch Scotland's role and about Scottish Water's commitment to working with us to ensure that language and communication are as good as they can be.

I turn to the overall performance assessment of Scottish Water. In its annual report for 2006-07, Waterwatch Scotland stated that it is

"considering improvements that can be made to OPA scoring so that a greater emphasis can be placed on Customer Service than is currently apparent."

Scottish Water's annual report shows that its overall performance assessment increased from 165 points to 248 points in 2006 to 2008; the aim is to have a score of 250 points by 2010. What improvements would Waterwatch Scotland like to see to the overall performance assessment to reflect customer service and any other relevant issues?

There are various aspects. More headings could be introduced under what is categorised as customer service in the current OPA scoring to gauge what you and I would call customer service. OPA scoring is, by its nature, a quantitative measure, not a qualitative measure. If we bear in mind Scottish Water's period of catch-up with the English and Welsh companies, there is merit in having such broad-based quantitative measures, but they are not the be-all and end-all. For example, if a measure is that every phone call must be answered within 30 seconds, that is fine; that box could possibly be ticked. However, our concern would be what the customer experience was when the phone call was answered. We would like to see greater improvement through a shift away from purely quantitative drivers to more qualitative drivers. We should ask what the customer experience has been; it is not merely a case of asking whether a box has been ticked. We often come across scenarios in which statistics should be produced. If a customer satisfaction survey of people's experiences is carried out, it might be found that people's subjective experiences have been less than satisfactory whereas there might be a good score for the quantitative objective. We are keen to see such a general shift in emphasis.

You keep talking about the catching up that Scottish Water must do. Is that not part of the problem? We are trying to measure Scottish Water's performance against the performances of the English and Welsh water companies in their longer trajectory. It is not a question of catch-up—Scottish Water is on a different trajectory.

That question might be better directed to WICS. With regard to the general idea of catch-up, it is an unavoidable fact that OPA was introduced in England and Wales 15 years before it was introduced in Scotland, so I use the phrase in that context. Because OPA has been used in England and Wales, there is some merit in being able to draw comparisons with Scotland's position on a like-for-like basis.

Our emphasis is on Scottish Water going above and beyond the purely quantitative measures that are used in OPA. To be fair, there seems to be a general receptiveness to that in the industry. It is an area in which we are seeking to progress through the Waterwatch committees that Tom McClements mentioned, and through the work of Jim Black and others.

There is an aspect of the existing OPA that has not until now been measured in Scotland: assessed customer service. The complaints audit that I mentioned earlier will come into being fairly soon in relation to that. There are another seven measures within the area of assessed customer service, which are used in England and Wales, but not in Scotland.

As an organisation, we are encouraging the incorporation of those seven measures, which cover areas such as the provision of information to customers, communication with the elderly and disabled and the management of customer information with regard to revenue and debt. They are all useful measures that sit within the existing English and Welsh model, but they have not, as yet, been introduced in Scotland. We are encouraging their introduction to help to expand our view in relation to measuring the customer experience.

That underlines my point about not being able to compare Scotland and the English and Welsh companies directly in terms of catch-up. I take your point that the additional elements ought to be addressed. Are there any other targets that you think Scottish Water might focus on to encourage further improvements in the coming years?

We would certainly like changes to be introduced in other areas in order to benefit customers. The responsibility for that might not necessarily all lie with Scottish Water. One increasingly significant area is the impact of external sewer flooding. Work is currently being carried out on future regulatory periods that will ensure that that area increases in importance, but it is currently not funded. Scottish Water does not fund work on external sewer flooding, and in many ways it is hard to chastise and criticise the company for not dealing with the issue, as it is not charged to deal with it.

We will use our contacts data to flag up issues such as low pressure, external sewer flooding and so on, and we hope to build those into future regulatory regimes. The initial engagement that we have had with the Government and stakeholders has been fairly positive in that regard. Our role is to keep chipping away to ensure that that is the case.

Are there any other targets that you think should be added?

With regard to the current measures, there is scope for improvement within the areas of inadequate pressure or unplanned supply interruptions. There are also issues around sewer flooding, in relation to which there is an opportunity for Scottish Water to undertake further work and score higher through OPA.

As Tom McClements said, there is scope for including in the OPA assessed customer service. There is also scope to go beyond that, in acknowledging not only the importance of those quantitative measures, but the quality of service to customers. We are currently discussing with Scottish Water and with ministers two new scores, which fit in not necessarily with OPA, but with ministerial objectives.

One score would be based on a survey that Scottish Water would carry out, covering the start-to-finish process of the customer experience. I know that England and Wales are considering introducing something similar that is based on the survey that Scottish Water carries out just now. Scottish Water is viewed as being one of the leaders in the UK industry with regard to how it surveys its customers.

There is another measure that would lead to better customer service. The Scottish ministers should make it one of Scottish Water's objectives to reduce the number of complaints about Scottish Water that Waterwatch Scotland has to deal with. If Scottish Water dealt with them in-house and dealt with them well, there would be no need for customers to come to Waterwatch Scotland, and that is the ultimate aim. Scottish Water should deal with complaints in the first instance.

Is a final determination score of 250 high enough, given that it is just about the average score for companies in England and Wales, and given the good raw water quality and quantity that Scottish Water has as a starting point?

It is a realistic score in terms of the state of the assets, information, and ability to do things on the ground. I go back to the phrase "catch-up". I am sure that many people are better qualified than Waterwatch Scotland to comment on the management of the capital programme and the ability to put things right. The OPA score hinges on all those things. Assets need to be in a good and working condition.

At present, the target is reasonable and helpful because it allows Scottish Water to pitch its target against what it knows that English and Welsh companies have achieved in the previous two years. That method is now being used as Scottish Water moves forward. Rather than simply picking a figure out of the air, Scottish Water has picked a figure that has some reference to the performance of the English and Welsh companies with which it has a right to compare.

The target is reasonable, given all the pressures that are on achieving it.

Do you not think that Scottish Water has a higher baseline to start with because of the good raw water quality? In that sense, is the target not quite soft?

As Gary Womersley said, we do not wish to get into the detail or discuss the technicalities of water quality. Scottish Water's final water quality figures do not start from a good position relative to England and Wales. The quality of the water produced at the tap is still catching up. That does not make the target soft.

I hesitate to say that an appropriate score should be 250, 260 or 240. Because companies in England and Wales have already been there, we can draw comparisons to a degree. However, we have to balance the ultimate cost to the customer. I am sure that Scottish Water could have increased its OPA score more quickly, but how would that reflect the customer experience? It has to be balanced. Customers bear the cost, and that depends upon infrastructure and investment works, and it has to be a balance between the two. Ultimately, there must be a stable environment for the customers.

Your annual report for 2006-07 said that WWS could flag up issues that are "bubbling under the surface"—an interesting metaphor to use in relation to the water industry. Have we dealt with the issues that you were able to flag up, or are there others that you could mention now?

I can give an example of how we were able to identify an issue that was bubbling under the surface and remedy it through the work of our committees and the continuing dialogue between Scottish Water and customer support.

As members might be aware, there was an issue with development constraints. The measures that Scottish Water put in place to address the situation did not seem to be improving matters, but various teething problems were creating specific issues. As a result of our ability to track our data and feed that back into Scottish Water, changes were made that probably mitigated the effect of those problems.

When it comes to subjects that are bubbling under the surface, it would be remiss of me not to put external sewer flooding at the top of the list. It is all very well talking about the issue in the abstract, but we deal with people who suffer from the problem fairly regularly—perhaps quarterly or twice a year. They just have to put up with it and wait for it to be cleaned up. The fact that our statistics tell us that other issues on which we engage with Scottish Water are falling off the radar only increases the significance of external sewer flooding.

As I mentioned, customer service is still the largest category of contact with us about Scottish Water, so notwithstanding the quick wins that have been made, there are still more quick wins to be made. As regards billing and charging issues, we have received many complaints about the non-domestic business meter installation programme. We are working with Scottish Water and the relevant companies to mitigate the impact of those problems. That probably covers the issues that are bubbling under the surface.

Is Waterwatch Scotland adequately resourced and supported by relevant organisations and, more generally, by the public sector in Scotland?

As we are a fairly new organisation, visibility is still an issue, which is one reason why we were keen to be signposted as much as possible, by Scottish Water, primarily, but also by other stakeholders in the industry. We have had many successes in that regard.

It would be easy for me to say that we would like more resource, but given that we are funded through a levy on Scottish Water rather than through general taxation, Scottish Water's failure to bring about improvements increases the levy, so it is almost a form of incentive-based regulation. Similarly, improvements in Scottish Water's performance would lead to a reduction in the levy.

The key concern is that our closest counterparts in England and Wales were fortunate enough to be able to fling some fairly large sums at advertising and raising their profile, and they did that on a fairly sustained basis. It was found that their profile was raised, but as soon as the sustained advertising campaign stopped, public visibility decreased. Bear it in mind that we are funded through a levy on Scottish Water and that it is funded, ultimately, by customers. I would like us to have millions of pounds, dare I say it, to spend on advertising, but we live in the real world.

Signposting has been mentioned. We need to be appropriately signposted by Scottish Water and various other stakeholders. The amount of contact that we have had with MPs and MSPs has been particularly encouraging. We are still fairly new, but hopefully that augurs well for the future.

I was going to ask about MSPs and MPs. You mentioned visibility. Is there any indication that MSPs, councils or any of the other people at whom complaints about water get directed are more aware of your existence as an organisation than they used to be? Is awareness increasing?

I would say that it is. It very much depends on whether there happens to be an emotive issue in the water industry at the time. When we first came into being, development constraints were an issue and our predecessor body had experienced a change to business charging, which resulted in a lot of complaints from customers. We cannot rest on our laurels. We will endeavour to ensure that we signpost and contact MPs and MSPs appropriately.

As members have no more questions, I thank the witnesses for joining us to answer questions. We will no doubt follow up some of the issues in future meetings with the regulator and with Scottish Water. I suspend the meeting to allow the witnesses to leave the room.

Meeting suspended.

On resuming—