Ofwat and CCW have published the second piece of joint research into customer priorities which will inform wider aspects of the 2024 Price Review and the development of common Performance Commitments and Outcome Delivery Incentives.

Ofwat and CCW commissioned research agency Yonder Consulting to conduct qualitative research to understand the preferences of water consumers in England and Wales as part of a joint programme of customer research for PR24.

Performance Commitments are used by Ofwat to measure water company progress towards the service outcomes that really matter to water consumers and make a difference to the environment.

Across England and Wales, the project aimed to:

• Understand what matters most to water consumers when it comes to water and sewerage services
• Explore water consumers’ views of Ofwat draft common PC areas for PR24 and identify any new areas for exploration
• Test descriptions and measurements of PCs with water consumers, and identify any improvements to make them more meaningful for inclusion in future research with water consumers
• Understand any differences in views between water consumer segments.

Key findings of the research include:

• People relate most to service aspects which do/ might impact them directly most important e.g. supply interruption, bill affordability
• Service aspects with immediate impact or consequences are of higher priority than those with consequences in a more distant future e.g. appearance taste and smell of water more important than biodiversity
• People are highly engaged where health seemingly at risk, especially easy to relate to in the current Covid climate e.g. lead in pipes, do not drink notices
• Perceived provider failure particularly irksome e.g. pollution incidents, leakage
• People relate more easily relate to outcomes e.g. managing sewer floods more relatable than storm overflows (even though they are connected).
• River and bathing water quality mentioned mostly in relation to news generated awareness – but carbon and biodiversity were seldom mentioned

Affordability, resilience and fairness important issues for customers

The following will inform the development of future regulation:

• Priorities that people spontaneously mentioned within the research - affordability, resilience and fairness - are important. Some aspects will be included within the performance commitments, especially those where resilience is required to provide good service. While these may not be reflected in full through the common performance commitments, CCW and Ofwat will consider affordability and fairness both within the price review development, and through wider areas of our work.
• People report being more tolerant of service interruptions where warning is given. People want to know how they will be affected, how long for, and the water company response time. Strong communication and advance warning help mitigate service interruptions. In particular, it seems people may tolerate planned interruptions of longer than three hours if communicated well. This may open up the possibility of companies using more low carbon solutions to reduce leakage, that may require longer interruption times.
• Participants considered a number of activities relating to the environment. This in part reflects the wider policy context. The research found people were more interested in, and found it easier to relate to, the specific impact of company activity and how this is measured rather than wider measures such as biodiversity or carbon.

Ofwat said it will be separately consulting on the introduction of a customer focused licence condition for water and wastewater companies which will also take into account the findings on customer preferences.

Click here to download the Yonder research report in full