Thames Water’s Customer Challenge Group has described the water company as “relatively silent” on the role that innovation of all sorts plays in delivering against its commitments and called on Thames to take a more overt approach to describing what is being done.

The CGC was commenting in its independent report giving their assessment of how the company performed in 2015/16 alongside Thames Water ‘s Annual Performance Report published this week. This is the first year of Thames Water’s current commitments and it is the first time the CCG has reported on them.

During the year, Thames Water provides the CCG with an update on performance on a quarterly basis - the CCG said that although it appreciates that there are many practical obstacles, it would prefer to see the performance metrics published at the same time as the main Thames Water results.

The report says:

“Overall, the CCG welcomes the fact that there is increasingly a “whole organisation” approach to trying to improve things for customers and the CCG acknowledges that this is driven from the very top of the organisation.”

“ It is clear that Thames Water are trying hard to tackle often long-standing infrastructure issues in order to improve customer service; they are also trying to put in place initiatives within their customer service operations which should in the long term offer a real chance of improvement. Materially improving the quality of the interactions with customers is also critical but it is not clear that this is yet happening to the extent Thames would want.”

Key issues the CGC says will need to be addressed in order to enable progress and meet the aspirations of customers include:

Customer service improvements -  Thames needs to persist in improving its interaction with customers, especially once customers make contact with them, often as a result of an incident of some sort. They appear to have started an extensive programme of process improvement and behavioural change but this needs to be continued and pushed forward. The CCG would challenge Thames to ensure that what they are doing is fully joined up across the organisation and that learning from one area is then implemented in others. There is a risk the nature of the ODI commitments may mitigate against this, with every area having separate targets for what is effectively the same issue with the same customers.

Cross industry comparisons - There are a number of measures where it is hard for customers and others to assess how well Thames is really doing, particularly in comparison with other water companies. The CCG understands that these measures were agreed between the individual companies and Ofwat, but as a general point, it is clear that some comparable data would be helpful for customers in order that they can assess whether Thames Water is performing better both relatively and absolutely…… Ideally industry comparisons need to be made more transparent to customers and should then act as a spur to improved performance from the company.

Social media and complaints - Several measures refer to minimising written complaints. The CCG have concerns that these are already outdated measures which do not reflect rapidly evolving customer behaviour, with many customers preferring to use social media rather than a more formal written approach. What constitutes a “complaint” may well be different in the eyes of social media users and Thames and this is likely to become an even more anachronistic measure in future years, the commentary says.

The CCG is urging both Thames Water and Ofwat to consider how they might evolve this (and the related SIM measure) in the coming year as leaving it untouched until the next review seems “inappropriate for a number of reasons and it may remove focus from reducing significantly more generic complaint measures. “

Greenhouse gas emissions -The measures for greenhouse gas emissions for water and waste water have not been met; Thames Water has told the CCG that they need to be refreshed as they are based on outdated Government carbon intensity for grid electricity. The CGC is urging that the measures are agreed as soon as possible to avoid a loss of focus, adding it would also appear that unanticipated demand may have played a part and that Thames may also wish to look again at its projections.

Underestimated demand - apparent from a number of measures that Thames Water have used figures that have led to an underestimate of demand overall. The commentary says it will be important that the company addresses this rapidly, as a continuing failure to manage or meet demand will have consequences for a wide range of measures and deliverables. The CCG said it is aware that Thames has relatively little flexibility in the number that it uses as its core assumption, as it must be a recognised evidence-based metric, but "would urge Thames to refresh its view as a matter of urgency."

Innovation – The commentary says that while it is clear from Thames Water’s report to customers on performance and from the regular briefings that there are a few highlighted initiatives being put in place, Thames is relatively silent on the role that innovation of all sorts plays in delivering against its commitments. Innovation will be key to effective delivery and a more overt approach to describing what is being done, with concrete examples, as well as explaining how innovation is being made a part of everyday life at Thames would be worthwhile, the CGC said.

Commenting on internal flooding incidents, where Thames Water has underperformed against their year-end target, the CGC said it was a cause for concern that Thames Water’s performance in terms of internal flooding incidents had occasioned a penalty, saying:

“This again is something that customers care deeply about and expect their supplier to guard against. Worryingly, Thames has also underperformed with regard to their water asset health infrastructure; poor performance in this area will clearly inhibit success in other crucial measures.”

On leakage, the CGC that while it recognised Thames Water's achievement in outperforming their target for the 10^th consecutive year, this  is a measure where comparisons would be especially helpful, noting that this is in the context of Thames having the highest level of leakage amongst its peers in terms of litres/property/day.

In conclusion, the CCG said

“Overall, it appears that much progress has been made, especially in the area of infrastructure and operations, which is perhaps to be expected given Thames’s inherent expertise and strengths. That said, credit should be given where appropriate. It is clear that Thames is making great efforts in the customer area, and that much behavioural and other change is underway in order to improve the customer experience. “

Click here to download COMMENTARY ON THAMES WATER’S PERFORMANCE COMMITMENTS June 2016