Defra flags complaint handling overhaul in responses to regulation report

Of all the areas of action recommended by the Environment, Food and Rural Affairs Committee in its October report on regulation of the water industry, complaints handling, per capita consumption, and water transfers emerged as those likely to see most in the way of new developments.

Responding to the report in December, Defra recapped existing achievements and work in train on most topics, rather than signalling any new policy. This included on leakage, abstraction, the non household market, financial and corporate reform and whether regulation is fit for purpose.

On the following topics, however, it signalled there could be developments.

• PCC – the department pointed to its imminent call for evidence on a PCC target and associated policy consultation [see Defra consultation story]. It also told water companies it expected them to put forward more ambitious PCC targets in the final versions of their business plans to 2025 and Water Resource Management Plans to 2045.

• Customer complaint handling – DEFRA reported Water UK had commissioned an independent review of the post-company complaints handling process. This will look at customer outcomes in general and at the alternative dispute resolution scheme in play in particular. DEFRA said: “The outcome of this review, and any action consequently taken by the industry, will help determine whether further action should be taken.”

Ofwat also responded to the Committee’s report in December. It agreed with EFRA and DEFRA on the need for action on complaint handling, pointing out it had urged Water UK to commission the review in the first place. “We believe there is scope to make the overall complaint handling process much more streamlined and accessible for customers and for the intelligence coming from customer complaints to be used more powerfully to drive real change in the way water customers treat their customers,” Ofwat said.

Elsewhere, the regulator indicated it was scrutinising how it might better support some of the outcomes desired by the committee. This included on leakage, where Ofwat said: “We…believe that a significant increase in industry collaboration and innovation is likely to be necessary to achieve continued improvements in leakage performance. As part of our review of our regulatory strategy, we will consider the appropriate role for Ofwat in relation to collaboration and innovation.” And on water transfers, where it said: “We are exploring a regulatory alliance to assess multi-company infrastructure options and drive regulatory alignment and cooperation where possible. We will progress discussions with Government in the coming months.”

The regulator also committed to the Committee’s requests that it undertake annual reviews into the business retail market and update the MPs on how its financial and corporate reforms for companies are progressing.