Strategies for water and renewables

Value for Money

24th July 2012, 12:23

A recent survey by the Consumer Council for Water (CCW) revealed that amongst the England and Wales water companies, just 35% of South West Water (SWW) customers felt they received value for money - the lowest score recorded. But perhaps the result tells us more about perceptions of value in the water industry than it does about the shortcomings of SWW.

Previous surveys by CCW showed that where low VFM was perceived by customers, just 3% suggested that this was down to being unhappy with leakage, misgivings about utility ownership or views on water as a human right. This suggests that in fact VFM is tied more than anything else to price; no prizes for guessing that SWW has the highest combined bills in the country. 

All consumers want is safe, reliable clean and waste water provision. Just that, and just like they've always had. The dilemma utilities have is that as prices rise to fund the cost of simply maintaining this essential service, it's almost impossible to add value to compensate. New flavours, apps and celebrity endorsements just don't figure. Nor can superior customer service help - by definition, people only contact their local utility when they have a problem with their supply.

So as prices rise, I suspect VFM will fall - indeed some of the other factors like ownership models and leakage efficiency may start to feed into the perception. (Northumbrian Water scored highest in the CCW poll: one wonders whether news of the whopping £330m dividend the new owners just took from the company will affect perceptions a year hence).

What the CCW survey really suggests is that it is meaningless to assess VFM until customers themselves understand the real value of an efficient water and waste water service. Droughts will help. Ironically, so may tariff increases.