WICS announces another significant improvement in Scottish Water's customer service
25 June 2008
The report outlines the Water Industry Commission for Scotland’s (WICS) main activities during this significant year for the water industry in Scotland, which saw non-household customers get the right to choose their supplier of water and sewerage services. The WICS annual report today explains how customers can expect to continue benefitting from improved levels of service and better prices at a time when other utility prices across the UK are rising.
Business Stream, Scottish Water’s new retail arm, has already achieved substantial savings. This has led to it offering lower prices to businesses than those set by WICS.
Scottish Water’s annual costs are around £5 million lower than WICS had expected when it set charges in 2005. If this progress is maintained, Scottish customers could see continued moderation in their bills, which are already an average of £15 lower than in England and Wales.
But WICS is especially pleased to recognise that while prices are rising by less than inflation, Scottish Water has improved its level of service to customers by 7%. It has already nearly matched the target that was set for it to achieve by 2010.
Sir Ian Byatt, Chairman of WICS said:
“We’re pleased customers have benefited in the last twelve months from better service. We welcome how determinedly Scottish Water has sought to meet the demanding challenges that we set it. Moreover, if Scottish Water sustains its current good performance in reducing costs, we expect that household water bills could continue to rise by less than inflation during 2010-14.”
“We continue to monitor carefully the delivery of Scottish Water’s investment programme. After a slow start last year, Scottish Water has significantly increased its investment expenditure. But we will continue to put critical emphasis on the sign-off of completed investment projects by the drinking water (DWQR) and environmental (SEPA) regulators to ensure customers receive the improvements they have paid for.”
Alan Sutherland, Chief Executive of WICS said: “The introduction of choice for businesses and public sector customers has brought a new era of improved services and competitive pricing.”
I am pleased to see that Business Stream is responding to this competitive threat and has upped its game considerably. For example, Tesco estimates that it achieved savings of £1 million more quickly in the past year across its Scottish operations, and has improved its environmental performance, because of the improved service it received. This is clearly a success of the new competition framework. Prospects are even better with new entrants to the market preparing to compete both on prices and in offering more tailored services.”
Read the full Annual Report here
For more press information:
- Arthur Browne or Julie Fourcade, 3 Monkeys Communications, 020 7440 2410 / 07906 488 614 / 07958 736 056 ([email protected] / [email protected])
- Katherine Russell, WICS’ Director of Corporate Affairs, 01786 430 200
Notes to editors:
1. The Commission’s statutory duty is to determine price limits for Scottish Water based on the lowest reasonable cost of achieving ministerial objectives for the water industry. In November 2005, the Commission determined price limits for water and sewerage services for the regulatory control period 2006-10. A document setting out WICS’ full determination is available at www.watercommission.co.uk.
2. During the 2006-10 regulatory control period, Scottish Water is tasked with delivering a £2.15bn investment programme. This investment is designed to deliver environmental, drinking water quality and customer service improvements specified by Scottish Ministers. Once investment projects are completed, they should be signed off by the appropriate quality regulator (either the Drinking Water Quality Regulator (DWQR) or Scottish Environment Protection Agency (SEPA)) as fit for purpose.
3. Scottish Water’s level of service is measured using an overall performance index. This is a weighted index that covers four areas: water supply, sewerage service, environmental impact and customer service. In 2005-06, Scottish Water’s score on this index was 165 points. In early June, the Commission agreed that Scottish Water score for 2007-08 was 248 points – an improvement of 7% over the year and 50% over the two years. The equivalent score in 2006-07 was 232 points.
4. From 1 April 2008, all business customers and public bodies, such as, local authorities, hospitals, schools etc are eligible to switch water supplier. The framework for competition is set out in the Water Services etc. (Scotland) Act 2005. The 2005 Act requires WICS to establish a regime to license new entrants into the market, and facilitate the orderly opening of the market. It also required Scottish Water to establish a separate retail entity (now Business Stream) to serve non-household customers in Scotland.